As the country’s largest department store, Macy’s has both advantages and disadvantages.
Advantages include decent liquidity. Fitch analysts noted that the company ended last year with $685 million of cash and is now replacing its $1.5 billion unsecured revolver with an expected $3 billion asset-based loan facility (including some $2.7 billion in its revolving credit facility and an up to $300 million bridge facility at a newly created financial vehicle, “Macy’s Inventory Funding LLC,” to which Fitch assigned an issuer default rating of ‘BB.’) Fitch assigned a ‘BBB-‘/’RR1’ rating to Macy’s that expected $3 billion secured ABL. Macy’s has debt of about $530 million maturing in January and $450 million maturing in January 2022, which Fitch analysts said it could pay down with cash on hand or revolver borrowings.
