(Reuters) - Neiman Marcus Group Ltd said on Monday it had reached an agreement with a majority of its lenders to extend the maturities of its debt by three years to help the luxury retailer turn around its business.
The new agreement is with the holders of more than 55 percent of the company's term loan and 60 percent of its unsecured notes, representing more than $2.5 billion of the company's debt.
The maturity of the term loan now extends to 2023, while the maturity for the unsecured notes was pushed out until 2024.
The company said the deal "provides substantial value" to its lenders and "creates ample runway to execute on and complete" Neiman Marcus' transformation plan into a luxury customer platform.
Neiman Marcus has been struggling with a nearly $5 billion debt load, due mainly to its 2013 leveraged buyout by Ares and Canadian public pension fund CPPIB from other private equity firms.
The heavily indebted company also said on Monday it would pay down $550 million of its debt to term loan lenders. Term loan lenders participating in the deal will also receive a higher interest rate. The retailer will also complete an exchange offer for notes.
"The commitments we have obtained for this transaction are a validation of our business and transformation strategy and our leadership team," Chief Executive Officer Geoffroy Raemdonck said.