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Michaels ups term loan to $1.95 billion, firms at Libor plus 425 bps
By Sara Rosenberg
New York, April 8 – Michaels Cos. Inc. upsized its seven-year covenant-lite first-lien term loan (Ba3/B) to $1.95 billion from $1.8 billion and finalized pricing at Libor plus 425 basis points, the low end of the Libor plus 425 bps to 450 bps talk, according to a market source.
The term loan still has a 0.75% Libor floor, an original issue discount of 99 and 101 soft call protection for six months.
The company’s now $2.95 billion of credit facilities, up from $2.8 billion, also include a $1 billion ABL revolver.
Credit Suisse Securities (USA) LLC, Barclays, Wells Fargo Securities LLC, Deutsche Bank Securities Inc., RBC Capital Markets, Mizuho, BofA Securities Inc., Truist, Citizens Bank, Jefferies LLC, BMO Capital Markets, BNP Paribas Securities Corp. and Goldman Sachs Bank USA are the arrangers on the deal.
Commitments were scheduled to be due at 1:30 p.m. ET on Thursday, accelerated from 5 p.m. ET on Thursday, the source added.
Proceeds will be used with $850 million of senior secured notes, downsized from $1 billion with the term loan upsizing, $1.3 billion of senior unsecured notes, around $1.4 billion of new equity and about $750 million of cash on hand to fund the buyout of the company by Apollo Global Management Inc. for $22.00 per share in cash. The transaction values Michaels at an equity value of about $3.3 billion.
Closing is expected in the first half of the company’s fiscal year, subject to customary conditions, including regulatory approval and the tender of shares representing at least a majority of the company’s outstanding common stock.
Michaels is an Irving, Tex.-based retailer of arts and crafts supplies and home decor products.
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