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Ascena Retail Group to launch $1.8 billion term loan B on Tuesday
By Sara Rosenberg
New York, July 9 – Ascena Retail Group Inc. is set to hold a bank meeting at 10 a.m. ET in New York on Tuesday to launch its proposed $1.8 billion seven-year senior secured term loan B (Ba2/BB+), according to a market source.
Goldman Sachs Bank USA and Guggenheim Securities LLC are the joint lead arrangers and bookrunners on the term loan B.
Official price talk on the loan is not yet available, the source said.
Past filings with the Securities and Exchange Commission have outlined expected term loan B pricing at Libor plus 350 basis points if corporate ratings are Ba3/BB- and Libor plus 375 bps if corporate ratings are lower than Ba3/BB-, with a 1% Libor floor.
The filings also said that the term loan would have 101 soft call protection for six months.
Along with the term loan, the company will have an asset-based revolver led by J.P. Morgan Securities LLC, the source added.
Proceeds will be used to help fund the acquisition of ANN Inc. and refinance some existing debt.
Under the agreement, ANN is being purchased for $37.34 in cash and 0.68 of a share of Ascena common stock in exchange for each share of ANN common stock. The transaction gives ANN an enterprise value of about $2 billion.
Closing is expected in the second half of this year, subject to customary conditions, including the expiration or early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and ANN shareholder approval.
At closing, ANN stockholders will own about 16% of Ascena.
Pro forma debt to last-12-months adjusted EBITDA excluding synergies will be 2.6 times.
Ascena is a Mahwah, N.J.-based specialty retailer offering clothing, shoes and accessories for missy and plus-size women. ANN is a New York-based women’s specialty retail fashion company.
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