September 20, 2017
The Chapter 11 bankruptcy filed this week by Toys ‘R’ Us has resulted in roughly $5.5 billion in CMBS exposure, according to analysis by Trepp. The retailer is seeking to resolve roughly $400 million in debt that will mature by 2018.
Trepp found that 109 outstanding loans, totaling about $5.5 billion, currently carry Toys ‘R’ Us exposure, with a large portion of the loans being CMBS 2.0 and 3.0 notes issued after 2010. The loan with the largest CMBS exposure is a $404.7-million portfolio backed by 123 properties secured by Toys “R” Us and Babies “R” Us stores.
The toy chain store has accumulated a heavy debt load recently, in part as its Babies ‘R’ Us business line lost market share to online competitors. The company said the majority of its Toys ‘R’ Us stores are profitable, though a review of its existing brick-and-mortar footprint is likely as the bankruptcy process unfolds.
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