David’s Bridal, Inc.

About

With more than 60 years of experience dressing women for all of life’s special occasions, David’s Bridal is built on the ideal that every woman deserves to have the wedding dress of her dreams regardless of her style preference, shape, size or budget. We believe in inclusivity, authenticity and empowerment and it is our mission to help every woman find the bridal gown that will allow her to be the best, most genuine version of herself on her wedding day. David’s Bridal is dedicated to helping each bride-to-be find her perfect dress with the assistance of online planning tools, knowledgeable stylists, and expert seamstresses who will guide her through her entire dress buying journey. With more than 300 stores located across the US, Canada, UK, Puerto Rico and a franchise location opening in Mexico City, we offer the convenience of one-stop shopping for the bride and her entire bridal party.

The Company was founded in 1950.

BDC Credit Reporter View

We’re writing this just before David Bridal’s files for a pre-packaged Chapter 11, which means the Company will be out of bankruptcy before long. Based on news reports, the Company is seeking to reduce its $760mn debt load by $400mn (i.e. a lot). However, the only BDC with exposure is non-traded Cion Investment, which is invested in the 2019 secured first lien debt which sits atop the Company’s capital structure along with an asset based Revolver and – shortly – a $40mn Debtor In Possession – facility. As of September 2018 Cion had written down its modest exposure by only 4% and full recovery is the most likely outcome. We may see the BDC get involved in the DIP, as often happens in these cases, but the additional debt is likely to be minor. Although we’ve just added the Company to our Watch List because of the upcoming restructuring from a BDC perspective – unless something goes terribly wrong – this should be a non-event and all principal and interest should be collected.  However, this was supposed to be a safe investment based on pricing of L + 400 when first launched in 2012 with a 2019 maturity.

Highlights

11/5/2018: Company weighs bankruptcy option after other alternatives fizzle.

David’s and three creditor groups have gone back and forth with out-of-court restructuring proposals for weeks. Early discussions contemplated a rights offering backed by existing noteholders including Solace Capital Partners and Oaktree Capital Group, a majority bond and loan holder, the people said. Those talks broke down after the financing from the funds did not materialize and creditors failed to agree on the pricing and terms of the proposed new debt structure, the people said.

2/12/2018: Moody’s Investors Service on Friday downgraded David’s Bridal debt deeper into junk territory, to Caa3, and changed its outlook to negative