New Issue: Payless ShoeSource $200 million 10-year notes yield 8½%

By Paul A. Harris

St. Louis, July 23 - Payless ShoeSource, Inc. sold $200 million of 8¼% senior subordinated notes due Aug. 1, 2013 (Ba3/B+) at 98.336 Wednesday to yield 8½%, according to a syndicate source.

Price talk was for a yield of 8¼%-8½%.

Goldman Sachs & Co. was bookrunner on the Rule 144A/Regulation S deal. The co-managers were Fleet Securities, Wachovia Securities, Inc. and Banc One Capital Markets.

Proceeds together with available cash will be used to repay the company's term loan.

The issuer is a footwear retailer is based in Topeka, Kan.

Issuer:	Payless ShoeSource, Inc.
Amount:	$200 million
Maturity:	Aug. 1, 2013
Security description:	Senior subordinated notes
Bookrunner:	Goldman Sachs
Co-managers:	Fleet Securities, Wachovia Securities, Banc One Capital Markets
Coupon:	8¼%
Price:	98.336
Yield:	8½%
Spread:	444 basis points
Call features:	Callable on Aug. 1, 2008 at 104.125, then 102.75, 101.375, declining to par on Aug. 1, 2011 and thereafter
Equity clawback:	Until Aug. 1, 2006 for 35% at 108.25
Settlement date:	July 28, 2003
Ratings:	Moody's: Ba3
	Standard & Poor's B+
Price talk:	8¼%-8½%

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