| NEW YORK
NEW YORK Nov 12 Warehouse retailer BJ's
Wholesale Club cut indicative price guidance on its
covenant-light $2.1 billion credit that will refinance existing
debt and back a $450 million distribution to shareholders,
sources told Thomson Reuters LPC.
The company also shifted $50 million from the second-lien
term loan to the first-lien tranche. BJ's now plans a $1.5
billion first-lien term loan, upsized from $1.45 billion. The
company downsized the second-lien term loan by the same amount
to $600 million from $650 million.
BJ's is benefiting from robust demand for leveraged loans as
investors continue to seek floating-rate assets and hunt for
yield. Strong leveraged loan demand has led to downward price
flexes of more than double the amount of upward price flexes for
the first week of November, according to Thomson Reuters LPC
The Libor spread on the first-lien term loan decreased to
LIB+350. The loan has a 1 percent Libor floor, and is offered to
investors at an original issue discount of 99.5. Previously,
pricing was guided at LIB+375-400. The Libor floor and issue
price are unchanged.
Price guidance on the second-lien term loan was tightened to
LIB+750, with a 1 percent Libor floor, and a 99.5 issue price.
Initial price guidance was set at LIB+775-800, with a 1 percent
Libor floor and a 99 issue price previously.
Call protection on the first-lien term loan is unchanged at
101 soft call for six months. However, the second-lien term loan
now has loosened call protection of 102, 101, versus 103, 102,
Corporate issuer ratings are B3(STA)/B-(STA).
Deutsche Bank is lead left, with Citi, Barclays, Jefferies
and Morgan Stanley to the right. Deutsche Bank declined to
comment. BJ's did not return calls for comment. Recommitments
are due today at 5 p.m. ET.
The first-lien term loan will mature September 26, 2019, and
the second-lien is set to mature March 31, 2020. This is in line
with the maturity dates of the company's existing $1.625 billion
Headquartered in Westborough, MA, BJ's Wholesale Club
operates membership warehouse clubs in the Eastern United
The company announced its acquisition by private equity
firms Leonard Green & Partners and CVC Capital Partners in 2011.