Michaels Stores gets $850 million amended, restated secured revolver

By Angela McDaniels

Tacoma, Wash., May 27 – Michaels Stores, Inc. entered into an amended and restated credit agreement on Friday that provides for up to $850 million of senior secured revolving financing due May 27, 2021, according to an 8-K filing with the Securities and Exchange Commission.

The revolver has a $200 million accordion feature.

The initial interest rate is Libor plus 125 basis points. The margin is either 125 bps or 150 bps depending on the average daily excess availability under the revolver.

The revolver has a 25-bps commitment fee.

Wells Fargo Bank, NA and JPMorgan Chase Bank, NA are the joint lead arrangers and joint bookrunners. Wells Fargo is the administrative agent and collateral agent. JPMorgan is the syndication agent. Bank of America, NA and SunTrust Bank are the co-documentation agents.

The amended revolver is subject to an earlier springing maturity date if more than $100 million of certain debt has not been repaid, redeemed, refinanced or cash collateralized or the administrative agent has not taken a reserve therefor as of the 60th day prior to the stated maturity date of such other debt.

The revolver is subject to a borrowing base equals to the sum of (i) 90% of eligible credit card receivables and debit card receivables, plus (ii) 85% of eligible trade receivables, plus (iii) 90% (increasing to 92.5% for the period beginning Oct. 1 and ending Dec. 31 of each year) of the appraised net orderly liquidation value of eligible inventory, plus (iv) 90% (increasing to 92.5% for the period beginning Oct. 1 and ending Dec. 31 of each year) of the lesser of (x) the appraised net orderly liquidation value of inventory supported by eligible letters of credit and (y) the face amount of eligible letters of credit, minus (v) certain reserves.

All obligations under the revolver are guaranteed by Michaels Funding, Inc. and all of Michaels Stores’ existing domestic material subsidiaries.

Michaels Stores is an Irving, Texas-based arts and crafts specialty retailer.

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