Toys ‘R’ Us interim DIP financing OK’d; final hearing set for Oct. 10

By Caroline Salls

Pittsburgh, Sept. 20 – Toys “R” Us, Inc. received court approval to access a portion of a proposed $3.1 billion in debtor-in-possession financing from lenders led by JPMorgan on an interim basis, according to an order filed Wednesday with the U.S. Bankruptcy Court for the Eastern District of Virginia.

The final hearing is scheduled for Oct. 10.

As previously reported, the DIP facility is made up of:

• A $2.3 billion post-bankruptcy DIP ABL credit facility consisting of a $1.85 billion ABL and a $450 million first-in last-out senior secured term loan. J.P. Morgan Chase Bank, NA will be administrative agent and collateral agent and JPMorgan will be lead arranger. There is a $300 million sub-facility for Canadian operations. The maturity will be 16 months, and interest will be Libor plus 250 basis points;

• A $450 million North American DIP term loan from an ad hoc group of pre-bankruptcy term loan lenders. The maturity will be Jan. 18, 2019 and interest will be Libor plus 775 bps; and

• $375 million of incremental notes due in 16 months to support international operations from an ad hoc group of Taj noteholders. Interest is at 11%.

The company said $1.3 billion of the ABL/FILO revolving facility and $450 million of the ABL/FILO term facility will be available on an interim basis, as will $350 million of the term loan.

Toys “R” Us is a Wayne, N.J., toy retailer. The company filed bankruptcy on Sept. 19 under Chapter 11 case number 17-34665.

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