Saks owner missed April payments on commercial mortgage debt

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HBC spokeswoman Nicole Schoenberg declined to comment.

The retail sector, already facing significant challenges, has been hit by the coronavirus outbreak, which has closed stores and pushed consumers even deeper into e-commerce adoption. Now there are more and more signs that the physical pain is going to be shared by bond investors.

Neiman Marcus Group Ltd. missed payments on some bonds this month, according to a letter from an investor. JC Penney Co. also skipped an interest payment and met with advisers, with bankruptcy among the options under discussion. Macy’s Inc., which has put workers on leave and closed stores, is considering a bailout financing deal to shore up its cash flow.

Nearly 11% of retail CMBS loans were past due up to 30 days this month, up from 1.7% in March, according to an April 23 report from the CRE Finance Council, a commercial real estate trade group. .

The two overdue CMBSs in HBC’s portfolio are a pool of $ 371.2 million with a 5.17% coupon that matures in August 2022 and a pool of $ 325 million with a coupon of 5.46. % which expires in August 2025.

The titles, created in 2015, funded 34 properties – 10 Saks stores and 24 Lord & Taylor stores. Saks locations include Beverly Hills, California; Atlanta; Chicago and Miami.

Toronto-based HBC, originally established as a fur trading business in the 17th century, was shut down this year, after selling Lord & Taylor, the company’s European operations, and flash-selling e-commerce company Gilt.

Efforts to turn the business around, including store closings and an inventory overhaul at the namesake chain Hudson’s Bay in Canada, have been slow to materialize amid larger department store struggles.

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