New Issue: Toys 'R' Us upsizes to $725 million, sells 8½% eight-year notes at 98.573 to yield 8¾%

By Paul A. Harris

St. Louis, Nov. 10 - Giraffe Properties, LLC priced an upsized $725 million issue of 8½% eight-year senior secured notes (Ba2/B+/) at 98.573 to yield 8¾% on Tuesday, according to an informed source.

The yield printed on top of the price talk.

Bank of America Merrill Lynch, Goldman Sachs & Co., Deutsche Bank Securities Inc. and Wells Fargo Securities were joint bookrunners for the issue, which was upsized from $650 million.

Proceeds will be used to repay debt and purchase certain properties from Toys 'R' Us Delaware, Inc.

The issuing entity is to be renamed Toys 'R' Us Property Co. II, LLC, a subsidiary of Wayne, N.J.-based toy retailer Toys 'R' Us.

Issuer:	Giraffe Properties, LLC, to be renamed Toys 'R' Us Property Co. II, LLC
Face amount:	$725 million, increased from $650 million
Proceeds:	$714,654,000
Maturity:	Dec. 1, 2017
Securities:	Senior secured notes
Bookrunners:	Bank of America Merrill Lynch, Goldman Sachs & Co., Deutsche Bank Securities Inc., Wells Fargo Securities
Co-managers:	Citigroup Global Markets Inc., Credit Suisse Securities, Barclays Capital Inc., J.P. Morgan Securities Inc., Morgan Stanley & Co.
Coupon:	8½%
Price:	98.573
Yield:	8¾%
Spread:	553 bps
Call protection:	Make-whole call at Treasuries plus 50 bps until Dec. 1, 2013, then callable at a premium
Equity clawback:	35% at 108.50 until Dec. 1, 2012
Trade date:	Nov. 10
Settlement date:	Nov. 20
Ratings:	Moody's: Ba2
	Standard & Poor's: B+
Distribution:	Rule 144A with registration rights/Regulation S
Price talk:	8¾% area

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