Hudson’s Bay Plans Loans for Saks Deal; True Religion Cuts Rate

Hudson’s Bay Co. (HBC) plans to finance its purchase of Saks Inc. (SKS) with $1.9 billion of loans while companies from True Religion Apparel Inc. (TRLG) to Eastman Kodak Co. revise terms of bank debt they are seeking.

Hudson’s Bay, Canada’s largest-department store chain, agreed to buy Saks for $2.4 billion. The Toronto-based company plans to finance the purchase with $1 billion of new equity, $1.9 billion of senior-secured loans and $400 million of senior unsecured notes and cash on hand, according to a statement today.

Companies are also revising the rates on loans for uses including acquisitions, refinancing of debt and plans to complete bankruptcy reorganization. They’re turning to lenders of leverage-loans as prices of the debt declined to 98.27 cents on the dollar today, according to the Standard & Poor’s/LSTA U.S. Leveraged Loan 100 index.

True Religion, the maker of designer jeans worn by Megan Fox and Angelina Jolie, increased the size of a loan it’s seeking to finance its acquisition by Towerbrook Capital Partners to $400 million from $375 million.

The debt will pay interest at 4.875 percentage points more than the London interbank offered rate, compared with a spread of 5 percentage points proposed last week, according to a person with knowledge of the transaction, who asked not to be identified because terms are private. The discount on the debt was reduced to 93.5 cents on the dollar from 93 cents.

Pinnacle Rate

Pinnacle Entertainment Inc. (PNK), an operator of seven casinos and a racetrack, cut the rates it’s offering to pay on $1.6 billion of loans being sought to fund the acquisition of Ameristar Casinos Inc.

The company is proposing to pay 2.75 percentage points more than Libor on a $1.1 billion seven-year term loan and an equally ranked three-year, $500 million debt portion, according to a separate person with knowledge of the financing, who asked not to be identified because the terms aren’t set. That compares with an initial offer of 3.5 percentage points more than the lending benchmark. The one percent minimum on Libor is unchanged.

Eastman Kodak Co. (EKDKQ) increased the rate it is willing to pay on a $420 million first-lien loan it’s seeking to help fund distributions to creditors under its reorganization plan to 5.5 percentage points to 5.75 percentage points more than Libor, from 4.75 percentage points to 5 percentage points, according to another person with knowledge of the transaction, who asked not to be identified because terms are private. Libor will have 1 percent floor, which is unchanged from the company’s original proposal.

Kodak Terms

The photography pioneer’s $275 million second-lien loan will now pay interest at 9.5 percentage points more than Libor, after initially asking lenders for a spread of 8.25 percentage points to 8.5 percentage points, the person said. The 1.25 percent minimum for Libor remains the same.

Kodak also increased the discount to investors. It will sell first-lien debt at 98 cents on the dollar, compared with an earlier proposal of 99 cents. The second-lien portion will be sold at 97.5 cents on the dollar, compared with 98.5 cents originally offered, according to the person.

ConvaTec Inc., a maker of wound-care products, is seeking a $784 million term loan and 532 million-euro portion ($706 million) to refinance debt, according to a person with knowledge of the transaction, who asked not to be identified because terms are private.

The term loan will pay interest at 3 percentage points to 3.25 percentage points more than Libor, and the euro portion will have a spread of 3.25 percentage points to 3.5 percentage points more than Euribor. Both pieces will be sold at a discount of 99.75 cents on the dollar.

To contact the reporter on this story: Christine Idzelis in New York at cidzelis@bloomberg.net

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net

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