Sears notes drop as company eyes restructuring; Neiman Marcus declines amid dispute

By James McCandless

San Antonio, Sept. 24 – A new week in distressed debt trading saw another session focused on retail names.

Sears Holdings Corp.’s notes moved lower after the company announced it had received a restructuring proposal from CEO Eddie Lampert’s company.

Neiman Marcus Group, Inc.’s issues declined. On Friday, the company was accused of being in default after a recent private transfer of equity in a subsidiary.

Sears’ 6 5/8% notes due 2018 lost 1¾ points to close at 93 bid. The 8% notes due 2019 fell 1¼ points to close at 34 bid.

On Monday, chief executive officer Eddie Lampert announced a two-part plan to address the company’s debt. The plan involves options for restructuring its debt, swapping the debt for convertible securities, and selling $1.5 billion worth of real estate. Lampert advised the board that “immediate action” was needed to address the company’s financial situation.

“The move would look good, but there’s not a lot that can bring Sears back from the brink,” a trader said.

Sears is a Hoffman Estates, Ill.-based department store chain.

Elsewhere in retail, Neiman Marcus’ notes weakened, according to a market source.

The 8% notes due 2021 lost 2½ points to close at 67 bid.

Debt investor Marble Ridge claimed on Friday that the company was in default over its recent private transfer of equity in e-commerce segment MyTheresa.

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