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A $2.2 billion junk bond deal financing the acquisition of luxurious retailer Neiman Marcus Group by the proprietor of Saks Fifth Avenue Inc. noticed sturdy demand as buyers flock to high-yielding offers within the credit score market.
The corporate boosted the dimensions of the five-year bond providing by about $200 million and it obtained twice as many orders than there have been bonds on the market, in line with individuals with information of the sale who requested to not be recognized discussing non-public particulars. The yield on the sale was 11 %.
Hudson’s Bay Co. agreed earlier this yr to purchase Neiman for $2.65 billion, with assist from Amazon.com Inc. and Salesforce Inc., which might take minority stakes. The deal stands to unite America’s two largest high-end department-store chains: Neiman and Saks, which Hudson’s Bay has owned since 2013.
Investor demand for the bond sale had already exceeded the dimensions of the providing earlier than it launched, Bloomberg reported.
Junk bonds are rallying on the again of a robust US economic system and the presidential election. Borrowing prices have dropped because the Federal Reserve has began slicing charges and spreads are close to the tightest for the reason that International Monetary Disaster as buyers flock to riskier credit with greater yields.
Jefferies Monetary Group Inc., Financial institution of America Corp., Royal Financial institution of Canada, Citigroup Inc., Morgan Stanley, Wells Fargo & Co., JPMorgan Chase & Co. and Capital One Monetary Corp. are serving as bookrunners on the deal.
Jefferies declined to remark. Saks, Neiman Marcus and Hudson’s Bay didn’t reply to requests for remark.
By Gowri Gurumurthy and Jill R. Shah
Saks Proprietor Hudson’s Bay Is Promoting Junk Bonds for Neiman Deal
Hudson’s Bay Co., the proprietor of luxurious retailer Saks Fifth Avenue Inc., is tapping the junk-bond market to assist finance its acquisition of Neiman Marcus Group.
