Troubled wedding gown retailer David’s Bridal Inc is nearing terms for a debtor-in-possession (DIP) financing package with a group of first-lien term loan lenders ahead of the company potentially filing for chapter 11 bankruptcy protection as soon as next week, Reuters reported. The company is the latest retailer to struggle as internet upstarts offer increased transparency on prices, turning its stores into showrooms where customers try on gowns only to buy them online. More than 15 U.S. brick-and-mortar retailers filed for bankruptcy last year. The possible DIP package is expected to be valued between $50 and $60 million, but this may be increased as conversations with lenders are ongoing. First-lien bank debt holders, which include asset manager Oaktree Capital, own the majority of David’s Bridal’s term loan debt, and are expected to provide the DIP financing and take equity in the company. David’s Bridal is owned by private equity firm Clayton Dubilier & Rice. The firm, through a portfolio company called American Greetings Corporation that issued David’s securities, skipped an October 15 interest payment on its 7.75 percent unsecured bond due in 2020. The issuer’s 30-day grace period following the missed interest payment expired yesterday.
