Retailers are Begging for the Government’s Help; Treasury Might Not Listen

Retail is reeling, as stores shutter and thousands of people lose their jobs while the coronavirus spreads. Now, the Treasury Department must decide whether the risk of the industry toppling is worth putting taxpayer money where many others would not. Treasury Secretary Steven Mnuchin has shown little appetite for risk and losses, even as he attempts to support a cratering economy.

Many mid-sized retailers do not qualify for programs the government has begun to roll out to save ailing companies. They are too big to qualify for the Main Street lending program aimed at companies with fewer than 10,000 employees or $2.5 billion in sales. Their debt is too distressed to qualify for the Primary Market Corporate Credit Facility aimed at larger companies.

That means companies like Macy’s may be in a bind. Macy’s has roughly $25 billion in sales, likely excluding it from the Main Street lending program. But its credit was downgraded to junk by the S&P Global Ratings in February, before the pandemic fully unleashed its wrath. Its debt was investment grade for two out of three credit rating agencies prior to late March.

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Macy’s is working with investment bank Lazard to restructure its debt, according to people familiar with the matter who spoke on condition of anonymity because the information is confidential. They added that the company is not focusing on bankruptcy…  CNBC News

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