Saks Global boosts liquidity, securing $600 million in financing

Saks Global’s portfolio includes Neiman Marcus, Bergdorf Goodman, Saks Fifth Avenue and Saks Off 5th.

Saks Global has strengthened its balance sheet with a new round of financing.

The luxury retailer said that it has secured $600 million in financing commitments from a majority of its existing bondholders. The two-part transaction includes a $400 million first-in, last-out (FILO) asset-based credit facility, with $300 million funded immediately and an additional $100 million to be funded upon completion of a bond exchange. 

The transaction also includes $200 million in additional commitments subject to the satisfaction of certain conditions. A majority of bondholders have committed to participate in the exchange, which will launch in the near term.

As reported by Bloomberg, creditors will have to exchange their current promissory notes for new debt instruments of lower priority, but they will maintain the same interest rate. Those who do not participate may lose protection in the event of default.

The deal should should help ease concerns among bondholders and vendors that Saks Global, which has a $4 billion debt load, would not be able to sustain its operations, reported WWD. Last December, Hudson’s Bay Company acquired Neiman Marcus for $2.7 billion. The transaction resulted in the creation of a new company called Saks Global.