Dec 3, 2013
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Vivarte loans slump after Moody's downgrades credit estimate

Dec 3, 2013

LONDON - Some lenders are considering selling French clothing retailer Vivarte's loans before a bank meeting on Thursday which will lay out plans to tackle the company's 2 billion euro ($2.71 billion) debt pile, banking sources said on Tuesday.

Source: Caroll

Moody's downgraded a credit estimate of Vivarte to Caa1 on Monday which caused a drop in the company's secondary loan price that extended on Tuesday on news of potential bank sales.

The company's unextended loans were quoted at 86 percent of face value on Tuesday and its extended loans at 88 on Tuesday, secondary loan traders said.

Vivarte was bought by Charterhouse in 2007 backed by leveraged loans totalling 3.43 billion euros but has been hit by an unfavourable economic and consumer environment in France and previously breached its loan covenants.

Charterhouse, Vivarte and Natixis were not immediately available to comment.

French bank Natixis has launched a sale of 70 million euros of exposure via an auction process with bids due on Wednesday, the sources said. The French bank was a mandated lead arranger on Vivarte's buyout financing.

"It is significant that a French bank is selling its loans in Vivarte," one of the sources said.

Options to manage Vivarte's debt include proposals to inject fresh equity, use cash on the company's balance sheet to repay lenders and adjust covenants to give the struggling company more headroom ($1 = 0.7377 euros)

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