"Charming Charlie LLC retails consumer discretionary products. The Company markets clothing apparel, jewelry, handbags, shoes, watches, eyewear, and accessories for women. Charming Charlie operates retail stores throughout the United States, and around the world".
Charming Charlie, LLC is a staple in malls and strip centers. The fast growing company is privately-owned but has publicly rated debt which makes considerable financial information occasionally available. Starting in 2015, Moody's downgraded the Company's ratings, citing a slowdown in same-store sales and lower margins and concerns about liquidity, and worried about a 2016 step-down in leverage allowed under its Senior Secured Term debt. BDC exposure of about $35mn is spread amongst 3 BDCs, all of which are in the Term Loan, and which has only an asset-based Revolver in front in the Company's capital structure. That debt has been marked down-and the Company has been on our Watch List- since the second half of 2015. At the end of the IIIQ 2016, one of the BDCs (THL Credit or TCRD) had discounted the value of the debt by a record 27%, but two other BDCs had more sanguine, single digit, discounts.To date, no restructuring or refinancing has occurred. However on November 23, 2016 news reports indicated the Company was meeting with investment bankers who might serve as advisors on restructuring negotiations with its lenders. The BDC Credit Reporter projects the Credit Trend as Down in the IVQ 2016. Moreover, with the strong likelihood the Company is about to restructure its balance sheet in the midst of historic dislocations going on in mall-based retail , we've dropped the Corporate Credit Rating to a 4 from a 3 (November 25, 2016), meaning we are concerned that the chances of the Company paying everyone back as planned has gone from Likely to Unlikely.