Some Toys `R’ Us Stores May Be Worthless, Deutsche Bank Says

(Bloomberg)—Some Toys “R” Us stores could turn out to be worthless to commercial mortgage-bond investors.

As many as 26 of the weakest properties in a 2016 commercial mortgage-bond deal secured by 123 Toys “R” Us stores may have little or no value, Deutsche Bank AG analysts Ed Reardon and Simon Mui wrote in a note Wednesday. The stores backing the $512 million bond had an estimated value of around $618 million in 2016 if they were to be vacated and re-leased. But that figure could be one-third lower now because retailers’ revenues have been dropping and more have been filing for bankruptcy.

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