Federated move on Macy's seen as fairly safe investment: analysts. (proposed merger between Federated Department Stores Inc. and R.H. Macy and Co. Inc.)

Daily News Record, January, 1994 by Rutberg, Sidney

Wall Street analysts view Federated Department Stores Inc's acquisition of a half of R.H. Macy and Company Inc's secured debt to Prudential Insurance Co as a relatively sound investment. The $449-million purchase price for 50% of Prudential's claim against Macy's took the form of a $109-million cash payment and a three-year note for the remainder. The claim pays an annual interest of 12% and is secured by Macy's store mortgages, making it the highest priority of all Macy's creditors. Even if Federated's plan to take eventual control of Macy's does not succeed, analysts say that the return on equity for the debt acquisition will still make it a good deal.

NEW YORK -- For Federated Department Stores, the purchase of 50 percent of Prudential's claim against R.H. Macy & Co. has...

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