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Men's Wearhouse prices Libor plus 350 bps seven-year term loan at 99
By Paul A. Harris
Portland, Ore., April 16 - Men's Wearhouse Inc. priced its $1.1 billion Libor plus 350 bps seven-year covenant-light term loan B (Ba2/B+) at 99 on Tuesday, according to a market source.
The deal broke to 99 5/8 bid, 100 1/8 offered on Tuesday and firmed to 99¾ bid, 100¼ offered on Wednesday, the source said.
The 350 bps represents the low end of the Libor plus 350 bps to 375 bps talk.
The term loan has a 1% Libor floor and 101 soft call protection for six months.
The company's $1.6 billion senior secured credit facility also includes a $500 million five-year asset-based revolver.
J.P. Morgan Securities LLC and Bank of America Merrill Lynch are the lead banks on the financing.
Proceeds will be used to help fund the acquisition of JoS. A Bank Clothiers Inc. for $65 per share in cash, or total consideration of $1.8 billion.
Other funds for the transaction are expected to come from $600 million of senior notes.
Backing the notes is a commitment for a $600 million senior unsecured bridge loan that is priced at Libor plus 675 bps, increasing by 50 bps every three months until a specified cap is reached. There is a 1% Libor floor.
Closing is expected by the third quarter, subject to the satisfaction of customary conditions, including expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and the tender of a majority of JoS. A Bank shares.
Men's Wearhouse is a Houston-based specialty retailer of men's apparel. JoS. A. Bank is a Hampstead, Md.-based designer, manufacturer and retailer of men's apparel, footwear and accessories.
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