| NEW YORK
NEW YORK Feb 26 Private equity firm Sycamore
Partners is slashing the equity commitment for its takeover of
The Jones Group Inc by almost half, and in turn adding
$250 million in new unsecured debt at Nine West Holdings,
sources told Thomson Reuters LPC.
Morgan Stanley, Jefferies and MCS Capital Markets are
leading the deal.
The unsecured debt comes in the form of a $250 million,
5.75-year unsecured term loan. Price guidance on the new loan is
LIB+525, with a 1 percent Libor floor and a discount of 99. The
loan will be not callable for 18 months. It will then be
callable at 102, 101, and par.
The additional debt reduces Sycamore's equity commitment to
$145 million from $400 million at the Nine West level, according
At the same time, the loan reduces Sycamore's total equity
contribution for its acquisition of The Jones Group to $301
million from $551 million, the same sources said.
The loan is being syndicated on a best-efforts basis.
Commitments are due March 3.
Representatives of Sycamore Partners declined to comment.
Along with the added debt and subsequent equity component
reduction, price guidance widened on the $470 million, 5.5-year
term loan B for Nine West already in market. Guidance on the 5.5
year-loan is now LIB+350-375. The 1 percent Libor floor and 99.5
discount price are unchanged. The loan will benefit from 101
soft call protection for 12 months.
Initial guidance on the $470 million term loan B was set at
LIB+325-350. Expected ratings were also lowered to B3/B- from
As reported, Sycamore, in conjunction with its takeover of
The Jones Group, is preparing for the potential sale of some of
the company's brands by carving out divisions and raising debt
at those segments.
Nine West Holdings, which includes Nine West Co and
Jeanswear Co, will represent the surviving corporation after the
buyout and carve-outs are completed.
A $255 million financing to fund Sycamore's acquisition of
Stuart Weitzman and subsequent carve-out of the high-end
footwear brand is also currently in market. Jefferies and MCS
Capital Markets lead the transaction.
There is also a $175 million senior secured asset-based
revolving credit facility committed by Wells Fargo and Bank of
America Merrill Lynch. Wells Fargo will provide a $25 million
senior secured term loan at the Jones Apparel carve-out level.
The buyout financing additionally includes a 70 million
pound sterling senior secured unitranche facility committed by
KKR Asset Management and a 25 million pound sterling asset-based
revolver provided by Burdale Financial, both for the Kurt Geiger
Sycamore has also committed financing for a $455 million
bridge loan that the company may use to buy back existing notes.
Jones put itself up for sale in the summer, following
pressure from activist investor Barington Capital Group LP to
focus on its shoe brands and to cut down its non-core fashion
The Jones Group's brands and licensing agreements include
Nine West, Brian Atwood, Anne Klein, Robert Rodriguez, Stuart
Weitzman and Easy Spirit.