PetSmart creditors have been seething for months. They are now up in arms after private equity owners - led by BC Partners - had the cheek to use loose covenants in bond documents to take 20% of the fast-growing online Chewy business (a subsidiary of PetSmart) for themselves as a dividend, while shifting a further 16.5% out of creditors' reach. Aggressive on the part of the owners? Well, yes. But totally unacceptable? Not really. Creditors in effect gave the go-ahead by agreeing to loose covenants in the first place and, with a struggling retailer on their hands, sponsors did what they could to salvage some of their investment. Now, PetSmart's owners have decided to float Chewy. That should be good news for PetSmart's creditors.
展开▼
