Neiman Marcus Does Some CDS Stuff Too
Also FX lies and corporate cruelty.
Clothing retailer Neiman Marcus Group has a lot of debt: a $2.8 billion term loan due in October 2020, some $1.6 billion of bonds due in 2021, $366 million drawn on a revolving credit facility that matures in 2021, some other stuff. That’s a lot—some $4.8 billion—to pay off in the next two years or so, and Neiman Marcus would really rather have more time to pay it. So it went out and asked its bondholders for more time.
There are different levers a company can pull to do this. The simplest thing to do is just go to your creditors, turn your pockets inside out, point out how empty they are, and say: Look, if you insist on me paying my debts as they come due, I am not going to be able to do it, and then we will both be sad; if you give me more time, I might be able to come up with more money. This can be pretty persuasive, and it will often be in both the company’s and the creditors’ interests to give the company more time rather than to throw it into default.