Neiman Marcus accepts $1.48 billion tendered 2021 notes for exchange

By Marisa Wong

Morgantown, W.Va., June 3 – Neiman Marcus Group Ltd. LLC said holders had tendered $1,477,000,000 of existing notes, representing 91.6% of its outstanding $960 million 8% senior cash pay notes due 2021 and 91.3% of its outstanding $655,746,580 8¾%/9½% senior PIK toggle notes due 2021, as of 5 p.m. ET on May 31, the expiration of its previously announced exchange offers.

The company has accepted for exchange all of the tendered notes and expects to issue on June 7 $728 million of new third-lien notes due 2024, bearing interest payable in cash at a rate of 8% per year for exchanged existing cash pay notes; $492 million of new third-lien notes due 2024, bearing interest at 8¾% per year for the exchanged existing PIK toggle notes; and 250 million shares of non-voting cumulative preferred shares of series A preferred stock of MYT Holding Co., a U.S. holding company that will indirectly hold, prior to the settlement date of the exchange offers, NMG Germany GmbH, which holds and conducts the operations of MyTheresa, accruing dividends at a rate of 10% per year.

Concurrently with the exchange offers, the company has been soliciting consents from holders to some proposed amendments to the indentures governing the existing notes to remove substantially all of the restrictive covenants and effect some other changes. The company said it has received consents sufficient to approve the proposed amendments to the indentures and will enter into supplemental indentures containing those changes that will become operative once the exchange offers settle.

Neiman Marcus had repeatedly extended the early tender date and final deadline of the exchange offers.

The early tender date was most recently extended to 5 p.m. ET on May 31 from 5 p.m. ET on May 30 and, before that, from 5 p.m. ET on May 28, 5 p.m. ET on May 17 and 5 p.m. ET on May 15, as previously reported. The original early tender date was 5 p.m. ET on May 10.

The expiration date was originally set for 11:59 p.m. ET on May 24 and later extended to 5 p.m. ET on May 28 and then to 5 p.m. ET on May 30.

Neiman Marcus had previously amended the offer’s minimum tender condition. The minimum tender threshold was lowered to 91% of the aggregate principal amount of existing notes from 95% of the aggregate principal amount of existing notes.

As of 5 p.m. ET on May 30, the previous early tender date, the company had received tenders for at least $1,477,000,000 of notes, unchanged from the amount as of the original tender date of 5 p.m. ET on May 10. That amount represents about 91.5% of the total outstanding principal amount of existing notes, which satisfied the offer’s amended minimum tender condition.

Holders who tendered their notes by the new early tender date will be eligible to receive on a par-for-par basis a combination of preferred stock and new third-lien notes.

Specifically, holders will receive for each $1,000 principal amount of existing cash pay notes tendered by the early tender date $845.27 principal amount of new 8% third-lien notes and 154.72723451 shares of MYT series A preferred stock; and holders will receive for each $1,000 principal amount of existing PIK toggle notes tendered by the early tender date $845.27 principal amount of new 8¾% third-lien notes and 154.72723451 shares of MYT series A preferred stock.

Holders tendering after the early tender date were originally to receive only new third-lien notes on a par-for-par basis. Specifically, holders would have been eligible to receive for each $1,000 principal amount of existing cash pay notes tendered after the early deadline $1,000 principal amount of new 8% third-lien notes; and holders would have been eligible to receive for each $1,000 principal amount of existing PIK toggle notes tendered after the early deadline $1,000 principal amount of new 8¾% third-lien notes.

In addition, holders will receive cash amounts for accrued interest for their exchanged notes up to but excluding the settlement date.

The settlement date for the offers was set as the fifth business day following the expiration date. The company expects to complete the exchange offers and consent solicitations at about the same time that it issues $550 million of new second-lien notes and amends and extends its senior secured term loan facility.

Each exchange offer is conditioned on, among other things related to the company’s restructuring, the tender of at least 91% of the aggregate outstanding principal amount of the existing notes and the delivery of the consents with respect to more than 50% of the aggregate principal amount of each series of the existing notes.

Adoption of the amendments to each existing indenture required the consent of holders of a majority of the outstanding principal amount of the existing notes governed by that indenture.

Holders who tendered their notes for exchange were deemed to have delivered their related consents.

In a press release on April 30, the company said holders of about 90.8% of the existing notes had entered into its previously announced transaction support agreement that also includes holders of its term loans and had agreed to deliver consents to amend the existing indentures.

D.F. King & Co., Inc. (www.dfking.com/nmg or 866 751-6310 or nmg@dfking.com) is the information agent for the Rule 144A and Regulation S exchange offer.

Neiman Marcus is a Dallas-based department store and catalog retailer.

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