According to recent press and people familiar with the matter, Toys “R” Us, Inc. has hired a law firm to help restructure its roughly $400 million in debt due 2018, a move that could include the marquee toy store filing for bankruptcy. The Company has hired restructuring lawyers at Kirkland & Ellis to help address the looming payments, the people said.
On September 7, 2017, S&P Global Ratings lowered its ratings on Toys “R” Us, Inc., including the corporate credit rating to CCC+ from B-, its senior unsecured notes rating to CCC- from CCC and its senior secured notes rating to CCC+ from B-. According to S&P Global, the downgrade reflects their view that the Company may choose to address certain 2018 maturities at less than par or engage in a broader restructuring. Moving into 2018, refinancing risk will remain high for the debt that matures in 2019. The Company has roughly $400 million of secured and unsecured debt maturing in May and October 2018, with significantly more in 2019, across its capital structure. Moving into 2018, refinancing risk will remain high for the debt that matures in 2019.
During the week of September 4, 2017, Toys “R” Us, Inc.’s 7 3/8% Senior Notes due 2018 were trading at a level around $75.457. Read more on distressed companies.