Michaels Stores to launch $2.27 billion term loan B-1 on Friday

By Sara Rosenberg

New York, Sept. 15 – Michaels Stores Inc. is scheduled to hold a lender call at 10 a.m. ET on Friday to launch a $2.27 billion term loan B-1 due Jan. 28, 2023, according to a market source.

Deutsche Bank Securities Inc. is the bookrunner on the deal.

Price talk on the term loan B-1 is Libor plus 275 basis points with a 1% Libor floor, the source said.

The term loan B-1 has 101 soft call protection for six months.

Proceeds will be used to extend the maturities by three years of the existing term loan B-1, currently priced at Libor plus 275 bps with a 1% Libor floor, and term loan B-2, currently priced at Libor plus 300 bps with a 1% Libor floor, and fold them into the new single term loan B-1 tranche.

The company is also seeking an amendment to change the restricted payments ratio to 3.75 times from 3.25 times total net leverage and to increase the incremental allowance to $750 million from $500 million, the source continued.

Also, technical amendments will be made to align the term loan with the company’s existing ABL revolver.

Lenders are being offered a 7.5 bps amendment fee, the source added.

Commitments are due at 5 p.m. ET on Tuesday.

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

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