Neiman Marcus's New Bond Tanks in First Day of Trading

(Bloomberg) -- A new bond that Neiman Marcus Group Inc. is using to refinance its debt plummeted less than 24 hours after it started trading in the secondary markets.

The $550 million note set to mature in 2024 was quoted around 86 cents on the dollar, down nearly 11 points from the initial sale at 97, according to people familiar with the pricing who asked not to be identified discussing a private matter. The bond priced with a yield of 14.9%.

The luxury retailer issued the note as part of its offer to exchange certain bonds and push out the maturity on its $4.8 billion debt load. Proceeds will be used to prepay a portion of the outstanding amounts under the extended term loans.

Representatives for Neiman Marcus didn’t immediately respond to a request for comment.

Neiman also closed its exchange offer last week after a series of deadline extensions to boost participation and tweak the terms of the agreement. The retailer removed a provision that would have stripped guarantees from creditors who did not consent to the deal. It also dropped language that would have prevented creditors from bringing litigation over the recent MyTheresa asset transfers.

DriveTrain Trust was named as the new trustee for the notes, replacing US Bank in that role.

The debt exchange is expected to settle on or around June 7, according to filings. Credit Suisse Group AG arranged the transaction.

©2019 Bloomberg L.P.

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