Neiman Marcus Group Ltd. is poised to become the latest U.S. business to push lenders into supporting a refinancing, a trend that has raised concerns that some companies might be delaying a reckoning on unsustainable debt loads, the Wall Street Journal reported. In the coming weeks, Neiman Marcus is on track to replace around $4 billion of debt set to mature over the next two years with new bonds and loans that would mature in 2023 and 2024. The transaction isn’t a normal debt refinancing. Instead, Neiman Marcus, like many others in recent years, has offered its existing lenders a deal that would leave those that don’t participate more exposed to losses if the company files for bankruptcy down the road. In a presentation to lenders, Neiman Marcus said that its debt exchange would give it more time to increase its annual adjusted earnings before interest, taxes, depreciation and amortization, or Ebitda, by around 50 percent to at least $700 million in the next five years. After several years of declining or stagnant earnings, the company has said that it expects to start seeing meaningful improvement in fiscal 2020, according to the research firm CreditSights.
