Toys ‘R’ Us, TRU Taj reach deal for issuance of additional DIP notes

By Caroline Salls

Pittsburgh, April 9 – Toys ‘R’ Us, Inc., TRU Taj Finance, Inc. and some investors reached an agreement in principle regarding the issuance and sale of $80 million principal amount of the TRU Taj issuers’ 11% senior secured DIP notes, according to an 8-K filed Monday with the Securities and Exchange Commission.

If issued, Toys ‘R’ Us said the additional notes are expected to be interchangeable with the DIP notes issued under a Sept. 22, 2017 indenture.

The additional notes will be sold at a price of 97.5 plus accrued interest from the last interest payment date preceding the closing date up to, but not including, the closing date.

The issuers may redeem the notes, in whole or in part, at a price of 104 in case of redemption dates occurring before June 2 and a price of 103 for redemption dates occurring after June 2.

Proceeds from the issuance and sale of the additional notes would be used for working capital and general corporate purposes, including funding for the company’s operations in Central Europe and Asia.

The ultimate issuance and sale of the additional notes, and the terms and conditions of the issuance and sale, is subject to the approval of the U.S. Bankruptcy Court for the Eastern District of Virginia.

In addition, Toys ‘R’ Us and TRU Taj extended the previously disclosed waivers related to any events of defaults that may arise under the DIP notes and the 12% senior secured notes due 2021 in connection with insolvency proceedings and related initiatives.

The company said the waivers will terminate on April 12 if the issuers are not able to obtain bankruptcy court approval regarding the issuance and sale of the additional notes by that date.

Toys ‘R’ Us is a Wayne, N.J., toy retailer. The company filed for bankruptcy on Sept. 19, 2017 under Chapter 11 case number 17-34665.

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