Bear Stearns and CIT Group are in the market with a $350 million asset-based loan with a $25 million first-in-last-out tranche for Lord & Taylor last Thursday, according to a banker. Pricing is LIBOR plus 3 3/4% on the FILO and LIBOR plus 1 3/4% on the remaining $325 million.
The advantage of having a FILO tranche the first to be borrowed and last to be repaid -- is that the company can get more money from their borrowing base, according to a banker. "It costs more, but it gives them a higher advance rate above and beyond the normal advance rate," the banker said via email.
Federated Department Stores, owner of Lord & Taylor, announced in June it would sell the New York-based Lord & Taylor division to NRDC Equity Partners. The sale is valued at about $1.195 billion in cash and includes 48 Lord & Taylor stores in New Jersey, New York, Illinois, Massachusetts, Connecticut, Maryland, Virginia, Michigan, Pennsylvania and the District of Columbia.
Federated, headquartered in Cincinnati, Ohio, is a retailer that operates more than 850 department stores including Macy's and Bloomingdale's. NRDC is a partnership between Apollo Real Estate Advisors and National Realty & Development Corp. that acquires operating companies in retail, leisure, lodging and commercial real estate sectors. Calls to NRDC were referred to Richard Baker, president and ceo, who did not respond. Calls to a spokesman at Federated were not returned.