(Adds details from meeting)

By Tom Hals

HOFFMAN ESTATES, Ill., May 4 (Reuters) - Sears (SHLD.O: Quote, Profile, Research) will have "more than enough" access to credit markets and can take steps to generate cash if needed should the economy worsen, controlling shareholder and Chairman Edward Lampert said on Monday.

Addressing shareholders at the company's annual meeting, Lampert acknowledged press reports that the company was in discussions with banks about its $4 billion revolving credit agreement that expires in March. The borrowing facility has become a concern to analysts as the company's margins have been squeezed during the recession.

"We're pretty confident we'll have more than enough access to operate businesses and give us flexibility should conditions worsen," said Lampert, a hedge fund manager. "There are things we can do should conditions worsen."

Sears has closed some of its thousands of Sears and Kmart stores over the past year and has taken other steps to reduce costs, such as tightening inventory control. "We're taking a position to give us a cushion six months out," Lampert.

Sears has been hard hit by the housing downturn, which has cut into sales of its Kenmore appliances and Craftsman tools as well as lawn and garden supplies.

Lampert wouldn't predict when the economy might bottom and begin to recover, but he said the key for Sears would be a pick up in activity in the housing market.

Lampert said the search for a permanent CEO had been slowed by the company's new management structure and recession.