Shop Direct talks downsized £550 million five-year notes at 7% area, withdraws floater

By Paul A. Harris

Portland, Ore., Oct. 26 – Shop Direct Funding plc talked a downsized £550 million offering of five-year fixed-rate senior secured notes in the 7% area, according to a market source.

Official talk comes on top of initial price talk.

The deal size was decreased from £700 million, and a proposed tranche of floating-rate notes was withdrawn.

With the downsizing, a proposed dividend to shareholders is withdrawn from the use of proceeds; the revised use of proceeds is debt refinancing.

There was also a covenant change: the shareholder distribution basket is reduced to £50 million from £200 million.

With the revisions the deal remains in the market an extra day. Books close at 6 a.m. ET on Friday, and the notes are set to price thereafter. Books were previously scheduled to close on Thursday.

Global coordinator and lead left bookrunner Barclays will bill and deliver for the Rule 144A and Regulation S deal. Mediobanca is also a global coordinator. Lloyds and HSBC are joint bookrunners. Credit Suisse is the co-manager.

The prospective issuer is a Liverpool, England-based digital retailer and online credit provider.

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