Jefferies Said to Face Loss on Loan for Toms Shoes DealChristine Idzelis
Jefferies LLC may lose about $10 million on a $300 million loan it’s syndicating to finance Bain Capital LLC’s purchase of a stake in Toms Shoes LLC, according to a person with direct knowledge of the matter.
The firm is offering the loan to investors for as little as 90 cents to 92 cents on the dollar after failing to attract investors at 99 cents, said the person, who asked not to be identified because the information is private. The Wall Street Journal reported earlier that Jefferies may lose as much as $15 million on the financing. A spokesman for Jefferies declined to comment.
Toms, started in 2006 by Blake Mycoskie with the goal of giving a pair of shoes to a needy child for every one it sold, said in August that Bain agreed to buy a stake in the business and that New York-based Jefferies had committed financing for the deal. Terms of the loan offering could still change, the person said.
Jefferies started marketing the debt to investors about three weeks ago, at the time proposing an interest rate of 4.75 percentage points more than the London interbank offered rate, according to data compiled by Bloomberg. The benchmark rate had a 1 percent minimum as part of that proposal.
Alex Stanton, a spokesman for Bain who works at Stanton Public Relations & Marketing, and Doug Piwinski, a spokesman for Toms, didn’t immediately return phone calls seeking comment.