Neiman Marcus Launches Junk 5NC2 Bond at Mid-High 7%s to Emerge from Bankruptcy

Struggling American retailer Neiman Marcus is making a return to the capital markets with a new junk dollar bond looking to raise $1bn via a 5Y non-call 2Y first lien bond. The company, which exited Chapter 11 about six months back, has released initial price guidance for the bond at “mid-high 7%s” and is expected to price later today. The proposed issuance is expected to be rated Caa2/CCC+ and is managed by JP Morgan, Bank of America and Goldman Sachs. Proceeds from the issuance are to be used to payback its $125mn first-in, last-out facility and ~$748mn exit term loan and bonds due 2025 that will result in a “modest reduction” in interest as per an S&P report. S&P analysts said, “We continue to view Neiman’s capital structure as unsustainable based on our expectation for pressured performance through fiscal 2021.”