| LONDON, July 15
LONDON, July 15 US listed underwear maker
Hanesbrands' acquisition of French peer DBApparel is
being financed with a $500 million leveraged loan, banking
sources said on Tuesday.
Hanesbrands agreed to buy DBApparel last month for 400
million euros ($545.62 million) from private equity firm Sun
Capital Partners, in an acquisition that brings together the
Wonderbra and Playtex brands.
JP Morgan, Barclays and HSBC are leading the deal, which
consists of a $500 million, euro-denominated term loan B paying
an interest margin of 275 basis points (bps) over Euribor with a
75bp Euribor floor, which guarantees minimum returns to
The loan is expected to be offered with a 99.5 original
issue discount, the banking sources said.
Lenders have been asked to make commitments to the BBB-/BAA3
rated loan by July 25.
Hanesbrands' existing $1.1 billion revolving credit facility
will remain in place, the banking source said.
The financing is covenant loose with leveraged and interest
cover covenants only, as opposed to the four covenants that are
typically used on buyout loans which also include fixed charge
and free cashflow covenants.
Covenant-loose loans, however, offer more protections than
covenant-lite loans, which have no maintenance covenants.
"The loan is an interesting one for the loan market because
pricing is tight but from a rating and credit quality point of
view, and the fact it has covenants, the deal is attractive," a
Hanesbrands is based in Winston-Salem North Carolina and
employs 51,500 people in more than 25 countries, according to
the company's website.
($1 = 0.7331 Euros)
(Editing by Tessa Walsh)