By  on February 12, 2013

J.C. Penney Co. Inc. has expanded its credit facility, securing some extra financial cushioning as it works to turn around operations.

The move increased the company’s borrowing capacity under the agreement by $100 million to $1.85 billion.

Penney’s said the amendment “enhances” its liquidity and “provides additional financial flexibility to support its transformation initiatives.”

The company has yet to turn to the facility, funds from which can be used for general corporate purchases.

Ken Hannah, chief financial officer of Penney’s said Tuesday afternoon: “As we enter the second year of our transformation, today’s announcement reflects the confidence of our banking group in our long-term strategy and further strengthens our liquidity position as we continue to execute our plan.”

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The company has been changing from a traditional department store set up to a group of shops-in-shop.

Last week, Ron Johnson, chairman and chief executive officer, told CNBC that his reimagining of the chain was on track to be finished by 2015.

“This year, we’ll complete the transformation of 40 percent of nearly 700 of our stores,” he said. “That’s significant. We’ll do it with the cash on hand. We have yet to tap into the revolver. It doesn’t mean we wouldn’t at some point, but we haven’t done that during the first year. We said we’d end the year with about $1 billion in cash, in a couple weeks we’ll tell people exactly where we ended up.”

The company will report its fourth-quarter results on Feb. 27. Analysts expect the company will post losses of $1.27 a share, down from earnings of $1.28 the prior year. Sales are projected to have fallen 23.2 percent.

Shares of Penney’s gained 0.7 percent to $19.41 in after-hours trading Tuesday.

The credit facility was co-led by J.P. Morgan Securities, Bank of America Merrill Lynch, Barclays Capital and Wells Fargo Capital Finance.

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