Bain’s Edcon May Be Vulnerable as Falling Bonds Signal Distress

Edcon Holdings (Pty) Ltd., South Africa’s biggest clothing retailer by sales, may become a target for distressed-debt buyers after the price on the unprofitable company’s bonds declined to a record.

Edcon’s 425 million euros ($461 million) of junior bonds due June 2019 had dropped to 22 cents on the euro last week from 38 cents the start of the year, according to data compiled by Bloomberg, indicating investors expect to take losses on their holdings. The bonds are the second-lowest in Bank of America Merrill Lynch’s Euro High Yield Index, behind only the subordinated securities of Heta Asset Resolution AG, the “bad bank” of failed Hypo Alpe-Adria-Bank International AG.