Ascena firms spread on $300 million term B at Libor plus 375 bps

By Sara Rosenberg

New York, June 8 - Ascena Retail Group Inc. set pricing on its $300 million six-year term loan B (Ba2/BB+) at Libor plus 375 basis points, the tight end of Libor plus 375 bps to 400 bps talk, according to a market source.

Also, step-downs were added to Libor plus 350 bps at 0.75 times total leverage and to Libor plus 325 bps at 0.5 times total leverage, the source said.

The pricing grid will go into effect upon delivery of the company's fiscal quarter-end January 2013 financials.

As before, the loan has a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for one year.

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.

Recommitments were due at noon ET on Friday, the source added.

J.P. Morgan Securities LLC and Bank of America Merrill Lynch are the joint lead arrangers and bookrunners on the deal.

Proceeds, along with revolver borrowings, 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.

Closing is expected this 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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