The debt of furniture suppliers Christie-Tyler and Courts is under pressure as the U.K. housing market reaches a potential peak. Some activity on Christie-Tyler's £112 million facility has been registered, said traders and debt investors. Christie-Tyler's bank debt, which is split into revolver, term "A" and term "B" tranches is quoted in the 50s.
Additionally, the talk in the market is that holders of Courts debt are looking to off-load their exposure as the company tries to increase its £260 million facility. Courts revolver is led by The Royal Bank of Scotland, Scotia Capital and Barclays Capital, according to Mark-It Partners/LoanX. A level for the paper could not be obtained, but it has recently been quoted in the 70s.
"It is an unhealthy environment for Christie-Tyler and Courts," one buysider said. "The housing market turned down for the first time in recent years," he said, adding "Anything having to do with house building is logically going to suffer a slow-down." According to the buysider, Christie-Tyler has also been hurt by its dependence on major customer Marks & Spencer. "[Christie-Tyler's] profits are on the floor." He added that Marks & Spencer is facing difficulties and will be pushing for savings, possibly rationalizing its supplier base.
Christie-Tyler meanwhile is a supplier to Courts. Adding to Courts' difficulties is a possible £42 million U.K. government ruling regarding its treatment of five-year structural guarantees given to customers. The cost has not been provisioned in the company's balance sheet accounts. An official at Christie-Tyler declined comment and a Courts spokeswoman did not return calls.