Neiman-Marcus makes strides in refinancing

3/1/2019
Luxury retailer Neiman-Marcus is close to an extension on its debt.

Neiman-Marcus has reached an agreement in principle with majority holders of each of the company’s term loans and unsecured notes on the framework of a comprehensive amend and extend transaction. If implemented, the agreement would give Neiman-Marcus three-year maturity extensions on the company’s credit facilities and unsecured notes.

All of the term lenders and almost all of the noteholders that have negotiated refinancing with Neiman-Marcus have re-executed confidentiality agreements with the company. Neiman Marcus says it will continue to “work diligently with its advisors, sponsors, lenders and noteholders towards a resolution that is beneficial for all stakeholders.”

Neiman-Marcus also said if implemented, the refinancing plan would provide “ample runway to execute on and complete its transformation plan into a customer-centric luxury platform.”

Neiman Marcus has been struggling under the burden of approximately $4.7 billion in long-term debt, almost all of which comes due in 2020 and 2021. The retailer has been in discussions since late fall with groups of creditors about various options.

For the first quarter of 2019, Neiman-Marcus reported its fifth straight quarter of same-store sales gains. However, the retailer also reported a net loss of $28.2 million, up from the $26.2 million net loss reported for Q1 2018. Neiman-Marcus said it expects to report that it recently completed its sixth consecutive quarter of same-store revenue growth.

In January 2019, Neiman-Marcus earned a spot on Fitch Ratings’ “Top Loans of Concern” list, which indicates significant risk of default.

In February 2019, Neiman-Marcus hired two new executives to help accelerate its customer-centric strategy and evolve the store experience.

Any agreement remains subject to final documentation.
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