Bank of America and Bear Stearns have launched syndication of a $1.575 billion deal to back the $2.06 billion acquisition of Burlington Coat Factory by Bain Capital.
The financing consists of an $800 million senior secured revolver and a $775 million senior secured term loan. The deal may also include a $500 million bridge loan package that is broken into $200 million in senior unsecured bridge loans and $300 million in senior subordinated unsecured bridge loans. The $500 million in bridge loans is not a guaranteed part of the credit and will only become active if the company fails to complete a sale of $500 million worth of high-yield bonds before the closing of the acquisition, according to a banker.
Price talk on the term loan is LIBOR plus 2 1/4%-2 1/2%, while the revolver comes in at LIBOR plus 1 1/2%. The revolver also has a subcomponent, an A+ tranche, which is priced at LIBOR plus 3 1/4%.
Based in Burlington, N.J., Burlington Coat Factory sells coats, shoes, suits, sportswear and other clothing. Bankers at B of A declined to comment as did a banker at Bear Stearns. Calls to Mark Nesci, executive v.p. and chief operating officer at Burlington, were not returned.