J. Crew ups term to $1.2 billion, cuts spread to Libor plus 350 bps

By Sara Rosenberg

New York, Feb. 4 - J. Crew Group Inc. increased its seven-year term loan (B1/B) to $1.2 billion from $1 billion and lowered pricing to Libor plus 350 basis points from Libor plus 375 bps, according to a market source.

Also, a step-down was added to Libor plus 325 bps at less than 3.25 times net senior secured leverage.

Furthermore, the Libor floor was reduced to 1.25% from 1.5% and the debt is now being sold at par, as opposed to 991/2, the source said.

The loan now includes 101 soft call protection for six months.

Recommitments were due from lenders by 5 p.m. ET on Friday.

The company's now $1.45 billion senior secured credit facility, up from $1.25 billion, also includes a $250 million five-year asset-based revolver, which, according to the filings with the Securities and Exchange Commission, is expected to be priced at Libor plus 250 bps.

Bank of America and Goldman Sachs are the joint lead arrangers and joint bookrunners on the deal.

Proceeds, along with senior unsecured notes and roughly $1.1 billion of equity, will be used to fund the buyout of the company by TPG Capital and Leonard Green & Partners LP for $43.50 per share in cash, or a total of about $3 billion.

The notes are being downsized by $200 million as a result of the term loan upsizing. SEC filings had the notes expected at $600 million, meaning that they're now likely to come with a size of $400 million.

A special shareholders' meeting to vote on the acquisition is scheduled for March 1. The company has already been granted early termination of the waiting period under Hart-Scott-Rodino.

J. Crew Group is a New York-based retailer of women's, men's and children's apparel, shoes and accessories.

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