The $295 million deal for J. Crew Group was pulled from the market Wednesday following the company's decision to delay its initial public offering until next year. As first reported on CIN's Website, the banks were scheduled to close and execute the loan as early as last week. The credit was set to fund with the IPO and a delayed-draw ticking fee would be paid in the interim. It was anticipated that the ticking fee would go out at 50 basis points, investors said, and then up to 75 and 100 basis points. But the company has decided to relaunch the deal at a later date in conjunction with the IPO. One banker said the IPO was moved because of softness in the equity markets.
Goldman Sachs and Bear Stearns were leading the deal, which was a seven-year, $295 million term loan. When it launched, pricing had been talked in the LIBOR plus 2 1/4%-2 1/2% range following a Ba3 rating from Moody's Investors Service (CIN, 10/10), but there was the potential it would go out at LIBOR plus 2%. The company had planned to use the proceeds to retire all of its preferred stock and 13.125% senior discount debentures and prepay all or a portion of its 9.75% senior sub notes, according to Moody's. The company had also intended to convert its 5% notes payable to common stock. Texas Pacific Group is the company's majority shareholder.
A spokesman for Texas Pacific Group declined comment. Calls to Jim Scully, executive v.p. and cfo, and bankers at Goldman Sachs and Bear Stearns, were not returned.
