Michaels downsizes offering of seven-year notes to $375 million, sets talk in 4 7/8% area

By Paul A. Harris

Portland, Ore., Sept. 17 – Michaels Cos., Inc. downsized its offering of seven-year senior secured notes (expected ratings Ba3/B+) to $375 million from $500 million, according to a market source.

Price talk was set in the 4 7/8% area, tighter than initial guidance in the 5¼% to 5½% area.

The deal was expected to price in a Thursday drive-by; however, no terms were available at press time.

J.P. Morgan Securities LLC is leading the offering.

The notes come with three years of call protection.

The Irving, Tex.-based retailer of arts and crafts supplies plans to use the proceeds, together with proceeds from a proposed term loan and cash on hand, to refinance its existing term loan.

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