Toys ‘R’ Us announces commitment termination, administration filing

By Caroline Salls

Pittsburgh, March 1 – Toys ‘R’ Us, Inc. said in an 8-K filed Thursday with the Securities and Exchange Commission that some of its subsidiaries have terminated all of the outstanding commitments under a second amended and restated syndicated facility agreement with Deutsche Bank AG New York Branch, leaving no further borrowings available.

The company said there were no outstanding borrowings under the facility agreement at the time of its termination.

In addition, Toys ‘R’ Us said that on Feb. 27 it terminated and repaid at maturity all amounts due under a term loan facility entered into by Toys ‘R’ Us France Real Estate SAS.

Before termination, the facility agreement provided for up to £115 million of borrowings and was otherwise scheduled to mature on the earlier of the maturity date of the 11% senior secured ABL DIP notes issued by TRU Taj LLC and TRU Taj Finance, Inc. and Jan. 18, 2019.

Toys ‘R’ Us said it is in discussions with some holders of the Taj DIP notes to provide its European and Australian subsidiaries with up to $50 million of liquidity through the release of escrowed net proceeds from the original issuance of the notes.

The company said it expects these funds will provide it with supplemental liquidity in light of the termination of the borrowing commitments under the facility agreement.

According to the 8-K, Toys ‘R’ Us Ltd. and some of its U.K. affiliates began an administration under the U.K. Insolvency Act 1986 as part of the company’s overall restructuring plan.

Under the administration, the U.K. subsidiaries will begin winding down business operations in the United Kingdom.

The company said it received waivers related to any events of defaults that may arise under the TAJ DIP notes and its 12% senior secured notes due 2021 in connection with the administration and related initiatives.

The waivers will terminate on March 15 if the parties are unable to reach a restructuring support agreement in connection with the reorganization of the issuers.

Toys ‘R’ Us said it is also in discussions with some holders of the Taj DIP notes to extend or otherwise eliminate its termination deadline.

Toys ‘R’ Us is a Wayne, N.J., toy retailer. The company filed for bankruptcy on Sept. 19, 2017 in the U.S. Bankruptcy Court for the Eastern District of Virginia under Chapter 11 case number 17-34665.

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