BONT up big today. +123% currently. I thought retail was dead lol.
Press Release from yesterday: S&PGR Raises Bon-Ton Dept Stores Second-Lien Rtg To 'CCC'
The following is a press release from Standard & Poor's:
NEW YORK (S&P Global Ratings) July 12, 2017--S&P Global Ratings today raised
its issue-level rating on The Bon-Ton Department Stores Inc.'s (an operating
subsidiary of Bon-Ton Stores Inc.) second-lien notes to 'CCC' from 'CCC-', and
revised the recovery rating to '5' from '6'. The '5' recovery rating reflects
our expectation for modest recovery (10% to 30%; rounded estimate: 10%) in the
event of default. The rating action on the company's results from our revised
estimate of the company's emergence valuation.
We have revised our valuation approach to a discrete asset valuation, which we
think better reflects the recovery estimates for the second-lien notes in
light of the relatively substantial real estate that the company owns and has
been pledged as collateral under the credit agreement. The SPE's that held the
properties are now restricted subsidiaries and thus guarantees the ABL loan
and secures it, with the second-lien notes also having a secured but junior
position.
Under the discrete asset valuation in our simulated default analysis, we
estimated a $703 million gross recovery value using a 5% dilution rate and 80%
realization rate on $714 million in inventory (as of April 28, 2017). We also
estimated about $161 million in recovery value from net fixed assets assuming
about 40% realization rate on land, buildings and leasehold improvements and
10% on furniture and equipment.
With a net recovery value of $668 million, after assuming 5% in administrative
costs, and $631 million in our estimated ABL balance outstanding and
prepetition interest, we estimate about $37 million would be available to for
recovery on the $364 million in second-lien note claims, which includes
estimated principal and prepetition interest. Our estimates result in a
10%-30% recovery with a rounded estimate of 10% for the second-lien
noteholders.
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AI
