What: HBC secures USD 2 billion-plus junk bond to finance Neiman Marcus Group acquisition, moving closer to deal completion while announcing the closure of its historic Palm Beach Saks Fifth Avenue store amid portfolio review.

Why it is important: This development represents a critical step in consolidating North American luxury retail, as HBC secures funding for the merger while simultaneously addressing operational efficiency through store network optimization.

HBC has secured a USD 2.2 billion junk bond, exceeding initial expectations by USD 200 million due to strong market demand, to finance its USD 2.65 billion acquisition of Neiman Marcus Group. The financing package includes additional support from investors including Amazon, Apollo, and Salesforce, with Apollo providing a USD 1.15 billion term loan.

As the deal nears completion, HBC is reviewing its store portfolio, announcing the closure of its 1926-opened Palm Beach Saks location. The merger, which received FTC clearance in August, will create Saks Global, projected to generate USD 10 billion in sales. Despite the progress, HBC faces challenges with vendor payments, though executives maintain that new financing and future property sales will improve liquidity.

IADS Notes: Following strong bond market reception and FTC approval, the deal appears set to close soon, creating a USD 10 billion luxury retail entity. This comes as HBC reviews its store portfolio, evidenced by the planned Palm Beach closure, while preparing to integrate with Neiman Marcus amid ongoing vendor payment challenges.

Saks owner HBC secures USD 2 billion bond to buy Neiman Marcus