New Issue: J. Crew prices $500 million 5.5-year PIK toggle notes at par with 7¾% cash yield

By Paul A. Harris

Portland, Ore., Oct. 28 - Chinos Intermediate Holdings A, Inc., the indirect parent of J. Crew Group, Inc., priced a $500 million issue of 5.5-year senior PIK toggle notes (Caa1/CCC+/) at par to yield 7¾% on Monday, according to a market source.

The notes pay a cash coupon of 7¾%, which steps up by 75 basis points to 8½% for PIK coupon payments.

Goldman Sachs & Co., BofA Merrill Lynch, Morgan Stanley & Co. LLC and Wells Fargo Securities LLC were the joint bookrunners.

The New York-based multi-channel retailer of women's, men's and children's apparel and accessories plans to use the proceeds to fund a dividend.

Issuer:	Chinos Intermediate Holdings A, Inc. (J. Crew Group, Inc.)
Amount:	$500 million
Maturity:	May 1, 2019
Securities:	Senior PIK toggle notes
Bookrunners:	Goldman Sachs & Co., BofA Merrill Lynch, Morgan Stanley & Co. LLC, Wells Fargo Securities LLC
Co-managers:	HSBC Securities (USA) Inc., TPG Capital, Mizuho Securities USA Inc., SunTrust Robinson Humphrey Inc.
Cash coupon:	7¾%
PIK coupon:	8½%
Price:	Par
Yield:	7¾%
Spread:	628 bps
Call features:	Make-whole call at Treasuries plus 50 bps until Nov. 1, 2014, then callable at 102, 101, par
Trade date:	Oct. 28
Settlement date:	Nov. 4
Ratings:	Moody's: Caa1
	Standard & Poor's: CCC+
Distribution:	Rule 144A and Regulation S for life
Price talk:	7¾% to 8% at 99
Marketing:	Quick to market

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