Houlihan Lokey Advises Myer

Houlihan Lokey is pleased to announce that Myer has closed a A$215 million, four-year asset-based lending facility consisting of a secured revolving credit and term loan facility with J.P. Morgan and Gordon Brothers, with proceeds being used to refinance existing credit facilities, support strategic initiatives, and provide day-to-day liquidity. The transaction closed on December 3, 2021.

Myer is Australia’s largest premium department store retailer, with a portfolio of 59 stores across the country. Opening its first store in 1900, today Myer operates a team of over 11,000 with five million loyal MYER one members. Myer’s offering is diverse and comprises eight core product categories: womenswear, menswear, childrenswear, intimate apparel, cosmetics, homewares, footwear, and accessories and entertainment.

Houlihan Lokey was engaged in January 2021 to assess refinancing options for Myer’s existing corporate debt facilities. In addition to holding negotiations with Myer’s existing creditor syndicate, Houlihan Lokey approached a wide range of new bank lenders and private credit funds. A key focus was repositioning Myer’s significantly improved credit story, evidenced by operational outperformance and a strengthened balance sheet, in order to achieve greater flexibility in its financing terms.

Through a competitive tender process, Houlihan Lokey identified optimal terms that achieved the client’s refinancing objectives via an ABL facility offered by new lenders J.P. Morgan and Gordon Brothers. Houlihan Lokey was then involved in supporting business diligence, negotiating the facility agreement and closing procedures—despite the majority of Myer stores being closed from July to October due to COVID-19-related state lockdowns.

The new facility refinanced existing credit facilities, which were due for renewal in November 2022, and was sized to reflect Myer’s lower overall funding requirements, given the successes of its capital management plan and improved cash-flow generation. The four-year duration and covenant-light nature of the ABL package provides significant long-term stability to Myer’s balance sheet. Additionally, the new facility will allow Myer to freely pursue key strategic initiatives that will support future growth and permit dividend payments to shareholders.