Shoe Retailer Taps Bank Mart For Headwear Buy

Bank of America is in the market with a $175 million senior credit facility backing shoe-retailer Genesco's debt-financed acquisition of Hat World.

  • 19 Mar 2004
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Bank of America is in the market with a $175 million senior credit facility backing shoe-retailer Genesco's debt-financed acquisition of Hat World. The new facility consists of a $100 million term loan and a $75 million revolver. The bank debt will fund about 61% of the hat-retailer acquisition and will also refinance an existing revolver scheduled to expire in July 2004. The total purchase price for Hat World is $165 million.

Moody's Investors Service has assigned a B1 rating to the company's new senior secured debt facility and lowered Genesco's senior implied rating from Ba3 to B1. The acquisition of Hat World enables Genesco to move into a new retailing segment and comes at a time when the company's existing footwear businesses are performing below historical levels, said Elaine Francolino, a v.p. and senior credit officer with Moody's.

Genesco's ratings are constrained by intense competition in footwear and hat retailing, according to Moody's. The frequent shifts in consumer preferences and the constant possibility that competitors can become very promotional is also an issue. Positive considerations though include Genesco's positioning in the shoe-retail industry, a following instead of leading-fashion strategy, disciplined inventory controls and a strong self-funding capacity. Despite its low comparable sales, "the company has great cash-flows," Francolino added. A Genesco spokeswoman declined comment until the acquisition closes.

Other Newly Rated Deals*
BorrowerLoan SizeRatingAgency
Astoria Energy $690 million Ba3 Moody's
Luigino's $205 million B1 Moody's
The Hillman Group $257.5 million B2 Moody's
* Thurs, March 11 through Wed, March17
  • 19 Mar 2004

GlobalCapital European securitization league table

Rank Lead Manager/Arranger Total Volume $m No. of Deals Share % by Volume
1 Bank of America Merrill Lynch (BAML) 6,665 23 13.02
2 Citi 5,781 17 11.29
3 BNP Paribas 3,530 14 6.89
4 Barclays 2,853 9 5.57
5 Credit Suisse 2,783 8 5.44

Bookrunners of Global Structured Finance

Rank Lead Manager Amount $m No of issues Share %
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1 Citi 99,250.27 279 13.13%
2 Bank of America Merrill Lynch 91,648.43 266 12.13%
3 Wells Fargo Securities 72,661.39 222 9.61%
4 JPMorgan 52,367.24 169 6.93%
5 Credit Suisse 41,885.89 127 5.54%