Petco launches $2.52 billion term loans repricing to investors

By Sara Rosenberg

New York, June 6 – Petco Animal Supplies Inc. launched on its call on Monday a $1.82 billion term loan B-1 due Jan. 26, 2023, and a $698 million term loan B-2 due Jan. 26, 2023, according to a market source.

Price talk on the term loan B-1 is Libor plus 375 basis points to 400 bps with a 1% Libor floor and talk on the term loan B-2 is Libor plus 400 bps to 425 bps with no Libor floor, the source said.

Both term loans have a 25 bps step down in pricing when first-lien leverage is 4 times, a par issue price, 101 soft call protection until January 2017 and amortization of 1% per annum.

Citigroup Global Markets Inc., Barclays, RBC Capital Markets LLC, Credit Suisse Securities (USA) LLC, Nomura and Macquarie Capital (USA) Inc. are the joint lead arrangers on the $2,518,000,000 in senior secured term loans.

Proceeds will be used to reprice the existing term loan B-1 from Libor plus 475 bps with a 1% Libor floor and the existing term loan B-2 from Libor plus 500 bps with no Libor floor.

Cashless roll commitments are due at 5 p.m. ET on June 13 and new money lender commitments are due at 5 p.m. ET on June 14, the source added.

Closing is expected on or before June 17.

Petco is a San Diego-based specialty retailer of pet food, supplies and services.

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