Bookrunners Bank of Scotland and Glitnir are preparing to launch the £400m debt package backing Icelandic investment group Baugur’s acquisition of UK department store House of Fraser.
The total £764m debt package comprises £584m debt and £180m of equity provided by the Baugur-led consortium, which is made up of Scottish retail entrepreneur Sir Tom Hunter together with Baugur allies Donald McCarthy, Stefan Cassar and Kevin Standford and the FL Group.
Only £400m of the £584m of debt will be syndicated, £184m is being provided by ring-fenced bridging facilities for the property assets and storecard business of House of Fraser.
The £400m of syndicated debt comprises a £40m six-year term loan A with a margin of 225bp over Libor, a £70m seven-year B loan at 275bp, a £70m eight-year C loan at 325bp, a £50m six-year capex facility at 250bp with a commitment fee of 125bp and a six-year £110m revolving credit facility at 225bp, also with a commitment fee of 125bp.
The £60m nine-year mezzanine has a margin of 100bp–500bp cash and 600bp PIK. Institutional investors are offered a 60% carve out of the B and C loans as well as the mezzanine. Senior leverage is 3x net debt to Ebitda, total leverage is 4x and rent adjusted leverage is 6x.
Tickets of £15m and £25m will be offered, although the fees have not been disclosed.