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Tara Lachapelle

99 Cents Only's Woes Tell Another Sad Debt Tale

The discount chain, like other retailers before it, is scrambling to restructure LBO borrowings as losses mount.
Photographer: Patrick T. Fallon/Bloomberg

The only thing cheaper than the items sold at 99 Cents Only Stores is the retailer's own debt. But you get what you pay for.

The California-centric discount chain is scrambling to restructure junk-rated borrowings tied to its 2012 leveraged buyout orchestrated by Ares Management and Canada Pension Plan Investment Board. Coming the same week that another retailer, Toys "R" Us, filed for bankruptcy, 99 Cents Only sadly echoes an increasingly familiar tale of financiers using overaggressive projections to load up a business with more debt than it can withstand.