NEW YORK ( The Deal) -- Hudson's Bay's pursuit of either creating a real estate investment trust for its properties or considering other options such as additional sale-leaseback agreements still appear to be in the works even though the Canadian retailer completed the sale of some of its Toronto properties on Wednesday.
"The Company remains committed to using our significant real estate holdings to unlock additional value for our shareholders and are exploring alternatives to help accomplish that goal," Hudson's Bay spokeswoman Tiffany Bourre said in a Feb. 26 email. "The Toronto sale-leaseback was a one-off transaction and does not change that commitment."
Founded in 1670 as a fur trading business, Toronto-based Hudson's Bay represents the longest continually run company in North America. The company currently operates department store chain Hudson's Bay and kitchen, bed and bath superstore Home Outfitters in Canada, along with Saks Fifth Avenue and Lord & Taylor in the U.S.
Through the sale of its Queen Street store and downtown Toronto complex to The Cadillac Fairview Corp. Ltd., Hudson's Bay garnered C$650 million ($584.7 million) that it said will be used to reduce a debt load that includes loans that were used to support its $2.9 billion acquisition of Saks.
Specifically, Hudson's Bay will pay down all of its $300 million second-lien term loan due in 2021 that was bearing interest at 8.25% and $150 million of the $2 billion first-lien term loan due in 2020 bearing interest at 4.75%. The remaining proceeds will be used to pay down the company's revolver.