Fitch: Target Filing Prompts Consumer Products Credit Review

Fitch: Target Filing Prompts Consumer Products Credit Review

February 8, 2015 Off By administrator

Fitch: Target Filing Prompts Consumer Products Credit Review
Article from Insurance News Net:

NEW YORK–(BUSINESS WIRE)– Target Canada Co.’s bankruptcy filing is leading to increased focus on the credit risk associated with retail customer expansion into international markets. Support linkages to stronger domestic parent companies may be warranted, Fitch Ratings says.

Target (A-/Stable) said last month it would pull out of Canada after dismal sales during the past two years. The bankruptcy has no financial or rating impact to US consumer product companies in Fitch’s rated universe. The amounts involved are immaterial to Fitch-rated companies now in the position of trying to collect funds for products sold to this Target subsidiary in Canadian bankruptcy courts.

This week, Target Canada is asking the court for a three-month extension of protection from creditors to May 15, 2015 from Feb. 13, 2015 as it winds down its retail operations. The list of unsecured consumer product vendors is extensive and includes ACCO Brands (BB-/Stable), Newell Rubbermaid, Inc. (BBB/Positive), and S. C. Johnson & Sons, Inc. (A-/Stable) among others.

Most are owed less than $ 1 million per the Jan. 15, 2015 consolidated list of creditors published by Alvarez & Marsal Canada, Inc., the court-appointed monitor for Target Canada. In general, toy industry exposure was larger given the sector’s high customer concentration in Target an…………………continues on Insurance News Net
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