Takko Is a Cautionary Tale for Junk Firms Facing Maturity Walls

The creditor takeover of a German retailer despite recent solid operational performance signals the risks faced by some European junk-rated issuers, amid a looming wall of maturing debt.

Takko Fashion GmbH, which runs almost 2,000 clothing stores across Europe, announced it will be taken over by its bondholders, led by Silver Point Capital LP as part of a debt restructuring. Unlike other companies falling prey to creditors earlier this year, Takko’s troubles weren’t due to a cash shortfall from operational difficulties. Its earnings in the 12 months through December were close to pre-pandemic levels, it said in March. ...