A Sears store.

Sears Holdings Corp. said it has agreements in place that enable it to extend a portion of its $500 million 2016 secured loan facility, as well as annuitize $515 million of its pension obligations.

The retailer said the agreements serve to “reduce the size of the company’s debt and pension obligations, as well as future risk associated with the company’s liabilities.”

Certain subsidiaries of Sears Holdings on Monday entered into an agreement to repay $100 million of its $500 million facility that had an original maturity in July 2017. The agreement further extends the maturity of the remainder of the loan until January 2018. There is also an option to further extend the maturity of the loan for another six months. Affiliates of both JPP LLC and JPP II LLC, and Cascade Investment LLC are the lenders under the loan facility. The lenders have a connection to Sears because the terms of the facility required approval by the Related Party Transactions Subcommittee of the retailer’s board, with the advice from Centerview Partners and Weil Gotshal & Manges, financial and legal advisers to the subcommittee.

Sears Holdings also entered into an agreement with Metropolitan Life Insurance Co. to annuitize $515 million of pension liability. Under the terms of the agreement, Metropolitan Life will pay future pension benefit payments to 51,000 retirees. Sears said the agreement is expected to have an immaterial impact on the funded status of the company’s total pension obligations, although it would serve to reduce the size of Sears’ combined pension plan, future cost volatility and plan administrative expenses.

The company in February said it had a comprehensive restructuring plan to streamline operations and targeting at least $1 billion in annualized cost savings in 2017. It also said back then that it planned on reducing outstanding debt and pension obligations by at least $1.5 billion. On Tuesday, Sears reiterated that commitment to reduce “outstanding debt and pension obligations of $1.5 billion for fiscal 2017 through improving profitability, asset sales and working capital management.”

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