J.Crew moving IP to unrestricted Cayman subsidiary

09 December 2016

by Reshmi Basu, Kyle Younker, and Andrew Berlin

 

J.Crew management is executing a plan to transfer the company’s intellectual property to an unrestricted Cayman Islands subsidiary, according to four sources familiar with the matter. The Madewell segment is not part of the transfer and will stay in its current box, two of the sources added.

 

The move is a likely prelude to an upcoming distressed exchange of the company’s USD 500m 7.75%/8.5% senior PIK toggle notes due 2019, one of the sources said. Holders of the retailer’s USD 1.5bn Libor+ 300bps (1% floor) term loan due 2021 intend to organize and explore strategies to block value from leaving their issuer box, the source added.