Ascena Retail $300 million loan led by JPMorgan and Bank of America

By Sara Rosenberg

New York, May 15 - Ascena Retail Group Inc.'s proposed $300 million six-year term loan will be done via joint lead arrangers and bookrunners J.P. Morgan Securities LLC and Bank of America Merrill Lynch, according to an SC TO-T filed with the Securities and Exchange Commission on Tuesday.

Pricing was not outlined in the filing. However, the company previously said that the spread would likely be in the range of Libor plus 325 basis points to 350 bps.

The term loan has a $100 million accordion feature.

Amortization is 1% per year, with the balance due at maturity.

Financial covenants include a maximum senior secured leverage ratio of 1.75 to 1.00.

Proceeds will be used to help fund the purchase of Charming Shoppes Inc. for $7.35 per share. The transaction is valued at about $890 million.

Other funds for the transaction will come from a $175 million draw under an existing ABL revolver that is expected to be upsized to $250 million from $200 million.

Pricing on the revolver can range from Libor plus 200 bps to 250 bps.

Closing on the acquisition is expected in the second quarter, subject to customary conditions and approvals and the tender of at least 80% of the shares.

Ascena is a Suffern, N.Y.-based specialty retailer of apparel for women and tween girls. Charming Shoppes is a Bensalem, Pa.-based retailer specializing in women's plus-size apparel.

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