November 15, 2018 / 5:30 PM / a month ago

David’s Bridal nears debtor-in-possession loan ahead of Ch. 11 filing

NEW YORK, Nov 15 (LPC) - Troubled wedding gown retailer David’s Bridal Inc is nearing terms for a debtor-in-possession (DIP) financing package with a group of first-lien term loan lenders ahead of the company potentially filing for Chapter 11 bankruptcy protection as soon as next week, sources said.

The company is the latest retailer to struggle as internet upstarts offer increased transparency on prices, turning its stores into showrooms where customers try on gowns only to buy them online. More than 15 U.S. brick-and-mortar retailers filed for bankruptcy last year.

The possible DIP package is expected to be valued between US$50m and US$60m, but this may be increased as conversations with lenders are ongoing, sources said.

First-lien bank debt holders, which include asset manager Oaktree Capital, own the majority of David’s Bridal’s term loan debt, and are expected to provide the DIP financing and take equity in the company. An Oaktree Capital spokesperson did not respond to requests for comment before press time.

Final terms were still being negotiated on Thursday, sources added.

The Chapter 11 bankruptcy protection would enable David’s Bridal to maintain day-to-day business operations, and sources have said the company intends to keep its bridal stores open.

“Our financial outlook is strong and we have ample liquidity to meet key business objectives today and in the future. We do not expect this process to materially impact our business or interfere with day-to-day operations or our relationships with customers and vendors,” a spokesperson for David’s Bridal said in an emailed statement.

David’s Bridal’s US$520m term loan B, due in October 2019, was quoted at an average asking price of 80.33 on November 13, down from 90.12 on October 22, according to LPC data. The average bid for North American retail loans was 96.34 on November 13.

David’s Bridal is owned by private equity firm Clayton Dubilier & Rice. The firm, through a portfolio company called American Greetings Corporation that issued David’s securities, skipped an October 15 interest payment on its 7.75% unsecured bond due in 2020. The issuer’s 30-day grace period following the missed interest payment expired on Thursday.

Evercore is the restructuring advisor to David’s Bridal and Debevoise & Plimpton is its legal counsel. (Reporting by Aaron Weinman Editing by Michelle Sierra and Jon Methven)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below