Refinancing set to hit retail sector hard, experts say

THE struggling UK retail sector will have to refinance $11.2 billion (£7.1bn) in syndicated bank debt and bonds that are due for maturity by the end of this year, a new survey out today reveals.

The analysis by law firm Freshfields Bruckhaus Deringer says a further $60.6bn (£38.2bn) is due by 2018 and subject to debt peaks of $16.4bn in 2015 and $14.2bn in 2014.

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A total of 46 UK-based retailers hold bank debt worth a combined $50bn due for maturity between now and 2018, it says, while 21 retailers hold retail bonds totalling $22bn and maturing over the same period – $6.2bn this year alone.

Adam Gallagher, a restructuring partner at Freshfields, said: “The UK retail sector continues to be affected by weak consumer confidence, tight credit, often inflexible lease terms, fierce competition and relatively high commodity prices.

“As well as having to contend with difficult trading conditions, retailers are facing the challenge of having to refinance over £6bn this year alone.”