Neiman, Ascena Retail retreat as negativity toward retail continues; PODS revises deadline

By Sara Rosenberg

New York, May 12 – Neiman Marcus Group LLC and Ascena Retail Group Inc. saw their term loans head lower in the secondary market on Thursday as disappointing earnings results from other companies in the retail sector continued to weigh on the debt.

Moving to the primary market, PODS LLC accelerated the commitment deadline for its incremental first-lien term loan and consent deadline for its amendment proposal, and MultiPlan Inc. came out with timing and structure on its buyout financing transaction.

Neiman, Ascena fall

Neiman Marcus and Ascena Retail were weaker in trading on Thursday as concerns for the overall retail sector continued to mount after Kohl’s Corp. released weak first quarter results in the morning, according to traders. Kohl’s results came on the heels of Macy’s Inc.’s disappointing numbers on Wednesday and Gap Inc.’s uninspiring sales results on Monday.

Neiman, a Dallas-based luxury retailer, saw its term loan quoted at 92½ bid, 93 offered, down from 93¼ bid, 93¾ offered on Wednesday and 94½ bid, 95¼ on Tuesday, traders said.

And, Ascena, a Mahwah, N.J.-based specialty retailer of clothing, shoes and accessories, saw its term loan quoted at 96½ bid, 97½ offered, versus 97 5/8 bid, 98 1/8 offered in the prior session, traders added.

Recent retailers’ results

On Thursday, Kohl’s, a Menomonee Falls, Wis.-based specialty department store chain, reported first quarter net sales of $3.97 billion, down from $4.12 billion in the comparable period in 2016, and net income for the quarter was $17 million, or $0.09 per diluted shared share, compared to net income of $127 million, or $0.63 per diluted share in the first quarter last year.

Department store chain, Macy’s, reported on Wednesday first quarter sales of $5.77 billion, down from $6.23 billion in the first quarter of 2015, and net income attributable to shareholders of $116 million, or $0.37 per diluted share, versus net income of $193 million, or $0.56 per diluted share, in the prior year.

Macy’s, also revised its guidance for earnings per diluted share (excluding settlement charges) in fiscal 2016 to a range of $3.15 to $3.40 from previous guidance of $3.80 to $3.90 per diluted share.

And, on Monday, Gap, a San Francisco-based retailer, said net sales for its first quarter were $3.44 billion, compared with $3.66 billion for the first quarter in the prior year.

PODS moves deadline

Switching to the primary market, PODS accelerated the deadline to noon ET on Friday from Tuesday for commitments for its $170 million add-on first-lien term loan B (B2/B) and for consents for its credit facility amendment, a market source said.

The add-on term loan B due February 2022 is talked at Libor plus 350 basis points with a 1% Libor floor, in line with existing term loan B pricing, and is offered at an original issue discount of 98.79.

Morgan Stanley Senior Funding Inc., Goldman Sachs Bank USA and Barclays are leading the loan that will be used to repay second-lien term loan and revolving credit facility borrowings and for general corporate purposes.

The amendment to the existing credit facility is to allow for the one-time prepayment in full of the second-lien term loan, refresh the $60 million “free & clear” incremental loan capacity and revise the incremental first-lien net leverage ratio to 5 times.

Lenders are being offered a 25-bps amendment fee.

PODS is a Clearwater, Fla.-based provider of storage and moving containers.

MultiPlan on deck

MultiPlan set a bank meeting for Monday to launch a $3.37 billion credit facility, according to a market source.

The facility consists of a $100 million five-year revolver and a $3.27 billion seven-year term loan B, the source said.

Barclays and Goldman Sachs Bank USA are leading the deal that will be used to help fund the buyout of the company by Hellman & Friedman from Starr Investment Holdings LLC and Partners Group.

As part of the transaction, Starr and Partners Group will retain minority investments in the company, and GIC, Singapore’s Sovereign Wealth Fund, and Leonard Green & Partners will invest alongside Hellman & Friedman.

MultiPlan is a New York-based provider of healthcare cost management solutions.

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