Kmart Climbs As Bankruptcy Exit Nears

  • 19 Jan 2003
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Kmart's bank debt shot up after the company announced that it was close to filing a reorganization plan. The company's three-year credit facility was said to have traded into the 32-33 range, up from the mid-20s, where it has been languishing since before the holiday season. Although net sales for the holiday season decreased 5.7% this year, the bank debt climbed as creditors began to see an end in sight for the bankruptcy process.

Kmart is currently pursuing an all-equity reorganization package and is looking to file its plan of reorganization and disclosure statement by Jan. 24. As a part of this package, it will resolve whether or not bank debt holders have guarantees from certain of the company's subsidiaries. Albert Koch, cfo, referred questions regarding the subsidiary guarantees to lawyers at Otterbourg, Steindler, Houston & Rosen, which is representing the unsecured creditors committee. Calls to the firm were not returned by press time. An attorney representing bank lenders declined to comment. The plan for reorganization will also set up a creditors' trust to benefit the creditors through any action that may arise out of a stewardship review.

Troy, Mich.-based Kmart is now looking to emerge from bankruptcy in late April. Kmart also reported that it has secured $2 billion in exit financing via GE Commercial Finance, Fleet Retail Finance and Bank of America. The new financing will replace the company's $2 billion debtor-in-possession line.

  • 19 Jan 2003

GlobalCapital European securitization league table

Rank Lead Manager/Arranger Total Volume $m No. of Deals Share % by Volume
1 Bank of America Merrill Lynch (BAML) 4,755 19 11.75
2 Citi 4,288 14 10.60
3 Rabobank 2,633 4 6.51
4 Goldman Sachs 2,615 4 6.46
5 Barclays 2,603 8 6.43

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1 Bank of America Merrill Lynch 57,945.74 181 12.35%
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