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Published
Jan 17, 2018
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Bon-Ton secures forbearance agreements with debt holders

Published
Jan 17, 2018

The Bon-Ton Stores, Inc. announced on Tuesday that it had obtained a forbearance period of just under two weeks from its lenders, after failing to make interest payments of $14 million due in December of last year within a thirty-day grace period.
 

The interest payment was due in December of last year - Facebook: bonton


The forbearance agreements, established with the company’s ABL credit agreement lenders and an ad hoc group of holders of the company’s 8% second lien secured notes due 2021 (2L notes), prevent these parties from taking their chosen course of action against the company until January 26.
 
The $14-million interest relating to the company’s 2L notes came due on December 15, 2017, at which point the brand invoked a thirty-day grace period under the terms of the indenture agreement. The company has not, however, been able to make the payment within this time frame. 

The Bon-Ton Stores, Inc. has corporate headquarters in York, Pennsylvania and Milwaukee, Wisconsin, and currently operates 260 stores in 24 states under the nameplates Bon-Ton, Bergner's, Boston Store, Carson's, Elder-Beerman, Herberger's and Younkers.
 
Along with many other brick-and-mortar retailers, the regional department store chain has been struggling in a rapidly changing industry, increasingly dominated by online retail giants such as Amazon. A number of credit ratings agencies have featured the company on their watchlists amid widespread speculation that a bankruptcy filing is on the horizon.
 
In November, Bon-Ton reported a Q3 net loss of $44.9 million with comps down 6.6%. In the same month, the company stated that it had plans to close at least 40 of its stores as part of a strategy to get its business back on track.

The forbearance agreements will expire on January 26, but this period will be automatically extended to February 4, if the forbearing holders of the 2L notes agree. 

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