Ascena launches $1.8 billion term loan B at Libor plus 350-375 bps

By Sara Rosenberg

New York, July 14 – Ascena Retail Group Inc. launched on Tuesday its $1.8 billion seven-year covenant-light senior secured term loan B (Ba2/BB+) with price talk of Libor plus 350 basis points to 375 bps with a 0.75% Libor floor and an original issue discount of 99.5, according to a market source.

The term loan has 101 soft call protection for six months and amortization of 1% per annum.

The incremental allowance under the term loan is $700 million, with additional amounts subject to closing date secured net leverage, and 50 bps MFN with a 12-month sunset provision.

Goldman Sachs Bank USA and Guggenheim Securities LLC are the joint lead arrangers and bookrunners on the term loan B.

Along with the term loan, the company is getting a $600 million five-year ABL revolver with pricing of Libor plus 125 bps to 150 bps based on excess availability and a 20 bps to 25 bps unused fee.

The revolver has a $200 million accordion feature.

Commitments are due on July 28.

Proceeds from the term loan and about $143 million in ABL revolver borrowings 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 during the week of Aug. 17, 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.

Other funds for the transaction will come from $150 million of balance sheet cash.

Total debt will be 2.2 times, and net debt will be 1.9 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.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.