Letters of credit (L/Cs) are an integral part of hedge fund manager Edward Lampert's financial rescue package for struggling US retailer, Sears Holdings.

Lampert is now owner, president, chief executive officer and major shareholder of Sears, while his hedge fund has taken on some US$900 million in Sears debt.

Transactions and closures

Since Christmas, transactions include one on 29 December 2016 for two L/Cs, arranged for as much as a half-billion US dollars. On 4 January 2017, Lampert secured an additional US$500 million loan facility.

The following day it was announced that the holding company would sell Craftsman Tools to competitor Stanley Black & Decker for US$900 million

On the same day, the company announced the closure of 150 more stores.

No turnaround

In December, Sears announced its biggest quarterly loss in more than four years while sales over the recent festive period are down at least 12 per cent.

The sale of the Craftsman brand, established in 1927, to Stanley Black & Decker is seen as a stopgap measure by analysts, some of whom believe that Lampert is "clearly trying to avoid the inevitable" Sears bankruptcy.

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