Target Secures $900 Million Credit Line

Target Secures $900 Million Credit Line

Cash is king for companies amid the Covid-19 crisis.

Minneapolis-based retailer Target Corp. has lined up a new $900 million line of credit. Target entered into the credit agreement on April 10 and disclosed it in an April 16 filing with the U.S. Securities and Exchange Commission.

Target’s credit line comes from a syndicate of large banks: Bank of America, Goldman Sachs Bank, Citibank, and U.S. Bank National Association. Amid the ongoing economic fallout created by the Covid-19 virus, companies everywhere are cutting costs and looking for cash to help ride out the uncertain days ahead.

A representative for Target could not immediately be reached for comment on Friday morning.

Twin Cities Business previously reported on Target issuing bonds to raise $2.5 billion. The retailer made the move to bolster its balance sheet amid the uncertain outlook amid the Covid-19 crisis. Target has actually seen an uptick in sales as shoppers stock up on household essentials, but there is no guarantee that the trend will continue.

At the end of its most recent fiscal year on February 1, Target had $326 million in cash on hand. Including investments and receivables, the company had a total of $2.6 billion in cash and cash equivalents. At the same time the company was carrying $11.3 billion in long-term debt and other borrowings.

“Everybody is trying to maximize their liquidity right now, even if it’s money they think they’re not going to need in the long run,” said Steve Dyer, CEO of Minneapolis-based Craig-Hallum Capital Group.

Small, mid-sized, and large companies are all in the same boat in the current climate of uncertainty.

“I think it’s everybody. You can’t have enough cash on hand at times like this,” said Dyer. “It’s not unusual at all during these times…It’s a tool for flexibility.”