Toys “R” Us Inc. is close to getting a cheaper rate on an operating loan that could help with the retail chain’s efforts reorganize in bankruptcy, Bloomberg News reported yesterday. While the company has a total of $3.1 billion in bankruptcy financing, including a $1.85 billion asset-backed revolver, the improved rate comes on a $450 million term loan. Initial talk for the loan, which is syndicated and fully funded, was a price of Libor plus 750 basis points, or 7.5 percentage points; now a rate of Libor plus 675 basis points is being discussed. The terms will potentially save the company around $4.4 million in interest over the lifetime of the loan, according to data compiled by Bloomberg. The terms also improved on the original-issue discount, giving Toys "R" Us 99.5 percent of the loan’s funds, rather than 99 percent. JPMorgan Chase & Co. is the lead agent on the 16-month loan, and Citigroup Inc., Deutsche Bank AG, Goldman Sachs Group Inc. and Barclays Plc are joint arrangers and book runners, according to court papers. Read more.
What does the future hold for retail bankruptcies? Be sure to attend ABI’s Bankruptcy 2017: Views from the Bench on October 17.
