Kmart Borrows $3.7 Billion

Chase Manhattan Corp. arranged $3.7 billion in loans for Kmart Corp., bolstering the retailer’s finances as it struggles to return to profitability.

In other financing moves, Kmart said in a regulatory filing it will offer 15 million convertible preferred securities at $50 apiece to raise $750 million, and will seek to raise another $1.2 billion by getting longterm financing for about $1 billion in real estate.

Kmart, the nation’s third-largest retailer, tapped Chase to make the arrangements in March. The loans are critical to the Troy, Mich.-based company’s revival because they will refinance about $3 billion in debt that comes due next year and provide $700 million to spruce up aging stores and improve operations.