New Issue: Michaels Stores sells $500 million eight-year notes at par to yield 8%

By Paul A. Harris

Portland, Ore., June 21 – Michaels Stores, Inc. priced a $500 million issue of eight-year senior notes (B1/B) at par to yield 8% on Friday, according to market sources.

The yield printed in the middle of yield talk in the 8% area but well wide of initial talk in the low 7% area. There were also covenant changes.

BofA Securities Inc., Barclays, Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and Wells Fargo Securities LLC are the joint bookrunners.

The Irving, Tex.-based craft store chain plans to use the proceeds, together with cash on hand, to redeem its 5 7/8% senior subordinated notes due 2020.

Issuer:	Michaels Stores, Inc.
Amount:	$500 million
Maturity:	July 15, 2027
Securities:	Senior notes
Bookrunners:	BofA Securities Inc., Barclays, Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and Wells Fargo Securities LLC
Co-managers:	BB&T Capital Markets, SunTrust Robinson Humphrey Inc. and UBS Securities LLC
Coupon:	8%
Price:	Par
Yield:	8%
Spread:	603 bps
First call date:	July 15, 2022
Trade date:	June 21
Settlement date:	July 8
Ratings:	Moody's: B1
	S&P: B
Distribution:	Rule 144A and Regulation S for life
Price talk:	8% area
Marketing:	Roadshow

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