Boyds Collection, a portfolio company of Kohlberg Kravis Roberts & Co., may have difficulties meeting near-term bank debt payments and will either be forced to refinance or get an amendment if operating performance continues to slide, according to Hal Diamond, a Standard & Poor's analyst. Boyds has suffered from sliding performance due to a "decline in demand, in addition to expenses related to the company's expansion in the retail area," Diamond said. If and when Boyds will seek an amendment is uncertain, he added.
The collectible products company is scheduled to repay $14 million in bank debt in 2004 and $28 million in 2005. Boyds also has a $40 million revolver maturing in 2005. Total debt outstanding, including bonds, is $76 million.
Calls to Scott Stuart, a partner at KKR and a director of Boyds, were referred to a spokeswoman. She responded that Boyds is confident it will be able to fulfill its debt payments and anticipated capital expenditures with its operating cash flow and its existing debt agreements. Joseph Macharsky, Boyds' cfo, did not return calls.
Boyds' debt comes from a recap completed in 1998 in which the company issued $165 million of bonds and obtained a $225 million "A" loan and a $100 million "B" loan. The company has repaid $130.6 million of bonds. The bank deal was led by DLJ Securities, now Credit Suisse First Boston, and Fleet Bank. A CSFB spokesman declined comment. A Fleet spokesperson did not return calls.