Bloomberg News

Michaels Stores Said to Seek $1.64 Billion Loan to Refinance

January 16, 2013

Michaels Stores Inc. (MIK:US), the world’s largest arts-and-crafts retailer, is seeking a $1.64 billion covenant-lite term loan B to refinance debt, according to a person with knowledge of the transaction.

Deutsche Bank AG, Bank of America Corp., Barclays Plc, Credit Suisse Group AG, Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley and Wells Fargo & Co. are arranging the financing for the Irving, Texas-based company, said the person, who asked not to be identified because the information is private.

The banks will host a lender call tomorrow at 2 p.m. in New York. Investors will have until Jan. 24 to let the banks know whether they want to participate in the transaction, the person said. The deal is expected to close and fund on Jan. 28.

The debt, due in January 2020, is expected to be rated B1 by Moody’s Investors Service and BB- by Standard & Poor’s, according to the person.

Charles Sonsteby, chief financial officer of Michaels, didn’t immediately respond to an e-mail seeking comment.

Covenant-lite debt doesn’t carry typical lender protection such as financial-maintenance requirements.

To contact the reporter on this story: Michael Amato in New York at Mamato3@bloomberg.net

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net


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