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

NEW YORK--()--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)

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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.

Contacts

Analytical Contacts:

Abhi Patel, Associate
(215) 882-5885
ajpatel@kbra.com

Mike Brotschol, Senior Director
(215) 882-5853
mbrotschol@kbra.com

Steve Kuritz, Senior Managing Director
(215) 882-5866
skuritz@kbra.com

Business Development Contact:

Marc Iadonisi, Senior Sales Director
(215) 882-5877
miadonisi@kbra.com

Contacts

Analytical Contacts:

Abhi Patel, Associate
(215) 882-5885
ajpatel@kbra.com

Mike Brotschol, Senior Director
(215) 882-5853
mbrotschol@kbra.com

Steve Kuritz, Senior Managing Director
(215) 882-5866
skuritz@kbra.com

Business Development Contact:

Marc Iadonisi, Senior Sales Director
(215) 882-5877
miadonisi@kbra.com