What: Hudson's Bay taps the junk-bond market with a $2 billion, five-year bond offering as part of its financing strategy for the Neiman Marcus acquisition, complementing equity investments from tech giants and secured loan facilities.

Why it is important: The successful bond offering, alongside tech industry investments, signals strong market confidence in the merger's potential to create a more competitive luxury retail platform.

Hudson's Bay Co. is launching a $2 billion, five-year bond offering to help finance its $2.65 billion acquisition of Neiman Marcus. The bond, which has already attracted strong investor interest with demand exceeding the offering size at early pricing discussions around 10.5%, will be used for both the acquisition and refinancing existing debt. The financing package includes multiple components: equity investments from Amazon and Salesforce, a $1.15 billion term loan from Apollo Global Management funds, and a $2 billion revolving asset-based loan facility from a banking consortium led by Bank of America. The deal's financing structure combines traditional retail funding mechanisms with strategic tech partnerships, reflecting the evolving nature of luxury retail consolidation.

IADS Notes: Following strong bond market reception, the deal combines Saks and Neiman Marcus into Saks Global, creating a $10 billion entity. The merger, backed by Amazon and Salesforce, reflects a strategic move to enhance digital capabilities and market presence, though it faces potential regulatory scrutiny.

Saks owner Hudson’s Bay is selling junk bonds for Neiman deal