Although $400 trillion is probably close to the notional amount of interest rate swaps outstanding; the market value is probably less than 5% that amount. Also, in no way are swaps all held by banks. Corporations, insurance companies, speculators and hedge funds all use interest rate swaps. Although banks do use swaps to pay a variable rate in exchange for fixed, and a rise in rates (tapering announcement) would negatively impact the value of these swaps, I highly doubt it alone would precipitate a financial meltdown.
The key phrase is "Penney was looking to raise as much $1 billion in new equity ...". The amount raised will all depend on what the public will pay for these shares in the public offering (minus fees to GS and other underwriters).
Interesting that the stock rose on the offering, contrary to past offerings. Perhaps the offering was underpriced and/or oversubscribed, or just very high interest in this stock since they've branched into European real estate and loan portfolios.