This Christmas Could Be Make-or-Break for Toys 'R' Us

Toys “R” Us might not have too many Christmases left, at least if you listen to what the bond market is saying.

Investors have been dumping obligations owed by the largest U.S. toy retailer in recent months, pushing the dollar price of those bonds sharply lower. Take a look:

Bond market watchers at Moody’s Analytics — a separate arm of the company from the group that actually rates the bonds — have been watching the dropping prices carefully. They say the price declines “imply that investors may well consider the upcoming holiday season to be a make-or-break time for the company.”

In fact, Moody’s analysts say Toys “R” Us bonds are trading at such low prices, you’d typically expect to see them on the bonds of an entity with a single “C” credit rating. That’s four notches lower than the “Caa1″ rating that Moody’s credit-rating arm has assigned to Toys “R” Us. Read more...