Fitch rates Macy’s notes BB

Fitch Ratings said it assigned a BB/RR3 rating to Macy’s Inc.’s new $360 million of second-lien secured notes issued at subsidiary Macy’s Retail Holdings, Inc. (MRH). The new notes are due between 2024 and 2030 in exchange for the unsecured debt of the same amount, coupon and maturity.

The notes will be secured by a second-priority lien on the same collateral securing the $1.3 billion senior secured notes recently issued under Macy’s Inc. The notes will be secured on a second-priority basis by a pledge from Macy’s PropCo Holdings, LLC and a first mortgage/deed of trust in all real property owned or to be owned by Macy’s PropCo. The notes will also be guaranteed on an unsecured basis by MRH, the agency said.

Fitch also affirmed Macy’s ratings, including its long-term issuer default rating at BB and the ratings on its debt at Macy’s Inc., Macy’s Retail Holdings, LLC and Macy’s Inventory Funding LLC.

The outlook is negative.

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