Neiman Marcus gets preliminary support for refinancing
Neiman Marcus Group has gained support for its strategy to delay the due date on its heavy debt load.
The upscale retailer said Monday that it has reached an agreement with 55% of its term loan lenders and more than 60% of its unsecured noteholders to extend the debt maturities by three years, which Neiman Marcus said will give it more leeway to overhaul its business. The agreement will extend the maturity date of the term loan to 2023 and the maturity date of the bonds to 2024, affecting more than $2.5 billion of debt. The company needs approval from at least 95% of both groups to complete the agreement, although it said “these thresholds may be lowered by the company at its sole discretion.”
"This transaction provides substantial value to our lenders and creates ample runway to execute on and complete Neiman Marcus Group's transformation plan into a luxury customer platform," said CEO Geoffroy van Raemdonck. “The commitments we have obtained for this transaction are a validation of our business and transformation strategy and our leadership team.”
Neiman has been burdened with nearly $5 billion of debt resulting largely from a $6 billion buyout by Ares Management and the Canada Pension Plan Investment Board in 2013. The company has a $2.8 billion loan due next year.
The upscale retailer said Monday that it has reached an agreement with 55% of its term loan lenders and more than 60% of its unsecured noteholders to extend the debt maturities by three years, which Neiman Marcus said will give it more leeway to overhaul its business. The agreement will extend the maturity date of the term loan to 2023 and the maturity date of the bonds to 2024, affecting more than $2.5 billion of debt. The company needs approval from at least 95% of both groups to complete the agreement, although it said “these thresholds may be lowered by the company at its sole discretion.”
"This transaction provides substantial value to our lenders and creates ample runway to execute on and complete Neiman Marcus Group's transformation plan into a luxury customer platform," said CEO Geoffroy van Raemdonck. “The commitments we have obtained for this transaction are a validation of our business and transformation strategy and our leadership team.”
Neiman has been burdened with nearly $5 billion of debt resulting largely from a $6 billion buyout by Ares Management and the Canada Pension Plan Investment Board in 2013. The company has a $2.8 billion loan due next year.