Dallas-based department store owner, Neiman Marcus Holding Company, Inc., has announced the successful completion of a $1.1 billion refinancing deal. The company issued new senior secured notes due in 2026, allowing it to repay outstanding borrowings. The proceeds from the refinancing were primarily used to repay approximately $871.8 million under various loan facilities, including term loans and senior secured floating rates. Additionally, Neiman Marcus plans to utilize the remaining funds for general corporate purposes, including the repayment of $75 million under its asset-based revolving credit facility. As a result, the company’s net debt will be reduced to approximately $850 million.

This refinancing move is considered a significant positive development for Neiman Marcus, as it simplifies the company’s capital structure and extends its debt maturities, in addition to reducing interest payments by over $30 million per year. These improvements strengthen the company’s financial flexibility and liquidity, ultimately positioning it for long-term profitability. Neiman Marcus Group EVP and CEO, Brandy Richardson, emphasized that this refinancing validates the company’s strategic transformation plan and reflects investor confidence.

Last week, information regarding Neiman Marcus’ refinancing plans was disclosed through a confidential offering memorandum. Initially planned at $1 billion, the demand from institutional investors led to an increase in the transaction size to $1.1 billion. It is worth noting that Neiman Marcus filed for bankruptcy in May 2020 and emerged from it in September, with new owners such as Pacific Investment Management Company LLC, Davidson Kempner Capital Management, and Sixth Street Partners. The bankruptcy process enabled the company to eliminate $4.4 billion in debt and $200 million in annual interest payments.

Despite the successful restructuring, Neiman Marcus has faced ongoing challenges, including heavy interest payments and declines in revenue. In the six-month period ending in January 2021, the company’s revenues decreased to $1.63 billion from $2.42 billion in the previous year. Currently, Neiman Marcus operates 37 stores under its own name, two Bergdorf Goodman locations, and five Last Call stores.

Useful links:
1. Neiman Marcus official website
2. Wall Street Journal article on Neiman Marcus’ bankruptcy filing