Neiman Marcus’ debt burden just got heavier.
The luxury retailer will make interest payments over the next six months with new debt to preserve its cash and bank line of credit.
Instead of making a current $29 million cash interest payment on $600 million notes due in 2021, Neiman Marcus will issue more bonds to holders to cover the 9.5% interest, the Dallas News reported.
Neiman Marcus is struggling under $4.8 billion in debt, with the load primarily resulting from the company’s $6 billion leveraged buyout in 2013, when current owners Ares Management LP and CPPIB, acquired it from other private equity firms. In March, the retailer announced it was exploring strategic alternatives, which could include a sale of the company or other assets.
Neiman Marcus had $105.8 million in cash on hand as of April 1, and $423.3 million of unused borrowing available to it under its $900 million asset-based revolving credit facility, according to the Dallas News.
Click here to read more.