26 Sep Investors in Toys R Us bonds and term loans are seeking stakes in the retailer’s debtor-inpossession financing, which offers the greatest protection as a messy bankruptcy process looms.
Stephen Hazelton, the founder of the credit document analytics group Street Diligence, characterised the toy retailer’s capital structure as “extremely complicated”. Guarantees between its US and foreign operations have muddied the water of who has first claim on any eventual payments Toys R Us is able to make to its creditors. The Gordian knot of inter-creditor agreements and intercompany loans has made “the actual pecking order . . . a bit of a mess”, Mr Hazelton said. “The guarantee relationships, the intercompany debt outstanding, all of that is extremely complicated and will have a material effect on who gets what.” – Financial Times.