Neiman taps junk-bond market to refinance its bankruptcy exit debt – The Dallas Morning News

Neiman Marcus Holding Company Inc. launched a junk-bond sale Thursday to refinance debt taken out to emerge from bankruptcy, marking the retailers return to the capital markets just six months after exiting from Chapter 11.

The troubled upscale department store is marketing a $1 billion five-year first-lien bond. Pricing is expected on Friday.

Proceeds will pay down the $125 million first-in, last-out facility and repay the roughly $748 million exit term loan and notes due in 2025, resulting in a modest reduction in interest expenses, according to a report Thursday morning by S&P Global Ratings.

Early pricing discussions are for a yield in the mid-to-high 7% range.

S&P rated the new notes and company CCC+, seven steps into junk. We continue to view Neimans capital structure as unsustainable based on our expectation for pressured performance through fiscal 2021, the S&P analysts wrote.

The COVID-19 pandemic shut down Neimans stores and caused an already precarious financial situation to tip it into bankruptcy. The Dallas-based company emerged from Chapter 11 in September under control of creditors Pacific Investment Management Co., Davidson Kempner Capital Management and Sixth Street Partners.

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Neiman taps junk-bond market to refinance its bankruptcy exit debt - The Dallas Morning News