Fitch cuts Toys ‘R’ Us, rates loans B, CCC+

Fitch Ratings said it assigned a B/RR1 rating to the new $350 million secured FILO term loan and a CCC+/RR3 to the $1,025,000,000 secured B-4 term loan that is being launched at Toys 'R' Us - Delaware, Inc. this week.

The new term loans will be used to repay the $646 million B-1 term loan and $350 million of the 7 3/8% senior secured term loans, both due Sept. 1, 2016. The company will also refinance up to $380 million of the $580 million of B-2 and B-3 term loans.

Toys-Delaware will seek amendments to the term loan and asset-backed loan credit agreements to complete these transactions.

Effective this refinancing, Fitch downgraded the remaining $200 million B-2 and B-3 term loans to CCC/RR4 from CCC+/RR3. It also downgraded the $450 million 10 3/8% senior unsecured notes due August 2017 and $400 million 7 3/8% senior unsecured notes due October 2018 at Toys 'R' Us, Inc. (Toys, HoldCo) to CC/RR6 from CCC-/RR5.

The transaction will address all of Toys-Delaware's 2016 maturities and a portion of 2018 maturities. This will push Toys’ next maturities to 2017 when $1,175,000,000 of debt comes due.

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