Payless/Collective talks $275 million loan at Libor plus 600 - 625 bps

By Sara Rosenberg

New York, Sept. 7 - Payless ShoeSource/Collective Licensing International launched its $275 million term loan (B1/B) on Friday with price talk of Libor plus 600 basis points to 625 bps with a 1.25% Libor floor and an original issue discount of 98 to 99, according to a market source.

The loan has 101 soft call protection for one year, the source said.

Commitments are due on Sept. 19.

Morgan Stanley Senior Funding Inc., Jefferies & Co. and KKR Capital Markets are leading the deal.

In addition, the company is getting a $250 million senior secured asset-based revolving credit facility from Wells Fargo Capital Finance.

Proceeds will be used to help fund the buyout of the company by Blum Capital Partners and Golden Gate Capital from Collective Brands Inc.

Closing is expected late in the third quarter or early in the fourth quarter. The deal is subject to customary conditions, including Collective Brands' shareholder approval and regulatory approval, which have both been received.

Payless, a specialty family footwear retailer, will continue to have headquarters in Topeka, Kan., and Collective Licensing, a development and licensing company, will remain based in Englewood, Colo.

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