KBRA Releases: Forever 21 Eyes Chapter 11 — KCP Re-Examines CMBS Exposure

NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) releases a follow-up special report on Forever 21, re-examining CMBS exposure to the struggling retailer in the wake of recent news the company may file for Chapter 11 bankruptcy protection. The company had engaged advisors earlier this year to assist with overhauling its operations and raising new capital, but negotiations with possible lenders have stalled according to media sources. The retailer will look to secure debtor-in-possession financing ahead of a Chapter 11 filing, assuming a deal cannot be inked in the 11th hour. Through the bankruptcy process, Forever 21 can look to recapitalize its business, strengthen its balance sheet and shed unprofitable store locations. A rationalization of its brick-and-mortar operations could have adverse consequences for retail landlords and CMBS investors alike.

Across 260 transactions, there are currently 195 loans secured by 222 properties, $38.76 billion by allocated loan amount (ALA), with exposure to Forever 21 as either a collateral or non-collateral/shadow tenant. For subscribers of the KCP platform, an updated list of loans and properties exposed to Forever 21 is available by clicking here. To access the full report, click here.

About KBRA and KBRA Europe

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.

Contacts

Analytical Contacts:

Maverick Force, Associate

(215) 882-5904

mforce@kbra.com

Marc McDevitt, Director

(215) 882-5857

mmcdevitt@kbra.com

Mike Brotschol, Senior Director

(215) 882-5853

mbrotschol@kbra.com