Post by The Ultimate Nullifier on Jan 14, 2014 8:46:38 GMT -6
U.S. holiday sales at Toys R Us were down 4.7% vs. the previous year, according to the Bergen Record, another round of bad sales news at the toy retailing giant, which just reported a $605 million loss for the quarter ended November 2nd. That compares to a 4.5% decline in 2012.
Declines in the value of Toys R Us debt were already raising red flags in November, and are continuing. The company is saddled with heavy debt from a leveraged buyout in 2005, and is facing brutal competition from both brick and mortar and online competitors.
Bloomberg has laid out the maturities of Toys R Us debt, which begin in 2016. On September 1 of that year, a $647 million term loan and $358 million of notes come due. Another $450 million in notes come due in August 2017; $400 million in bonds come due in October 2018; and a $975 million term loan comes due in August 2019. All are trading at a discount, reflecting a lack of confidence that the debt will be repaid.
The company’s credit line, which had around $500 million drawn on it as of early November, expires August 2015, and will have to be renewed.
Toys R Us has previously been able to roll over debt, but renewing its loans will get increasingly difficult because of the company’s operating losses.
Declines in the value of Toys R Us debt were already raising red flags in November, and are continuing. The company is saddled with heavy debt from a leveraged buyout in 2005, and is facing brutal competition from both brick and mortar and online competitors.
Bloomberg has laid out the maturities of Toys R Us debt, which begin in 2016. On September 1 of that year, a $647 million term loan and $358 million of notes come due. Another $450 million in notes come due in August 2017; $400 million in bonds come due in October 2018; and a $975 million term loan comes due in August 2019. All are trading at a discount, reflecting a lack of confidence that the debt will be repaid.
The company’s credit line, which had around $500 million drawn on it as of early November, expires August 2015, and will have to be renewed.
Toys R Us has previously been able to roll over debt, but renewing its loans will get increasingly difficult because of the company’s operating losses.