KBRA Credit Profile (KCP) Releases Special Report: New Sears Targets Additional Closures – CMBS Exposure

Kroll Bond Rating Agency (KBRA) releases a special report, “New Sears Targets Additional Closures – CMBS Exposure”, which examines CMBS exposure to New Sears store closures. Transformco (aka, ‘New Sears’) announced yesterday its intention to close an additional 96 stores by February 2020. The tally includes 51 Sears and 45 Kmart stores located in 28 U.S. states and Puerto Rico, with going out of business sales expected to commence in early December 2019. Yesterday’s announcement followed prior announcements in September 2019 and August 2019 that identified 97 stores and 26 stores, respectively, slated for closure. In less than nine months following its $5.2 billion bankruptcy acquisition of Sears Holdings Corporation, ESL Investments Affiliate Transformco has executed or put into motion the closure of 243 stores or approximately 57% of the 425 locations it acquired. Following the Q1 2020 closures, the company will operate only 182 locations–this does not account for New Sears’ pending acquisition of Sears Hometown, which operates a network of more than 400 smaller-format stores. The acquisition of Sears Hometown aligns with New Sears’ long-term vision to focus on smaller-format stores that emphasize tools and appliances.

KBRA Credit Profile (KCP) examined its roughly $630 billion coverage universe of over 1,000 transactions and identified 19 properties across 25 transactions, $1.26 billion, with collateral or non-collateral/shadow exposure to a Sears or Kmart that was included in the latest round of closures (96 stores). KCP subscribers can access that list by clicking here.

To read the full report, click here.

Related Publications: (available at kcp.kbra.com)

• A New Sears, but a Familiar Story – Store Closures Continue (September 2019)
• ESL Attempts to Stymie Sears Hometown Liquidation (April 2019)
• Additional Store Closures Announced as ESL Affiliate Submits Last-Minute Bid to Keep Sears Afloat (January 2019)
• Sears Bankruptcy Update, Additional Closures Announced – CMBS Exposure (November 2018)
• Sears Bankruptcy Update – Revised Lease Rejection Schedule (October 2018)
• Sears Files for Bankruptcy, Announces Additional Store Closures – CMBS Exposure (October 2018)
• Sears Spirals Towards Bankruptcy – CMBS Exposure (October 2018)
• Sears Closures August 2018 – CMBS Exposure (August 2018)
• Store Closures Continue as Sears Takes Another Step Towards Oblivion (June 2018)
• Tears for Sears (June 2017)
• With Sears, Macy’s and JCPenney, Two is Bad Company and Three’s a Crowd (February 2017)
• Sears Holdings Corp. Announces Additional Kmart Store Closures (September 2016)

   

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KBRA is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider, and is a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.

View source version on businesswire.com: https://www.businesswire.com/news/home/20191108005588/en/

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