29 Jan, 2021

PetSmart completes 2-part, $2.35B bond deal for refinancing; terms

PetSmart Inc. has completed a dual-tranche bond offering, printing $1.2 billion of 4.75% seven-year secured notes and $1.15 billion of 7.75% eight-year unsecured notes, sources said. Bookrunners on the deal were Barclays (B&D), J.P. Morgan, Apollo, Credit Suisse, Citi, Jefferies, MUFG, RBC Capital Markets, UBS, Wells Fargo and BC Partners.

Proceeds from the notes will be used alongside about $1.3 billion of equity from the parent company to refinance the firm's existing term loan, asset-based revolving credit facility, and outstanding notes — including the 5.875% bonds due 2025, the 8.875% bonds due 2025, and the 7.125% notes due 2023. The issuer is also raising a new $2.3 billion term loan B due January 2028 to support the refinancing.

PetSmart, backed by BC Partners, is a specialty retailer of pet products and services in North America. Terms:

Issuer PetSmart LLC and PetSmart Finance Corp.
Ratings BB-/B1
Amount $1.2 billion
Issue Senior secured notes (144A/Reg S for life)
Coupon 4.75%
Price 100
Yield 4.75%
Spread T+398
Maturity Feb. 15, 2028
Call Non-call three (first call at par plus 50% coupon)
Price talk 5%-5.25%
Notes Issuer may redeem up to 10% of notes at 103% per annum,
until Feb. 15, 2024; change of control put at 101; up-to-40%
equity claw at 104.75% until Feb. 15, 2024.
Issuer PetSmart LLC and PetSmart Finance Corp.
Ratings CCC+/Caa1
Amount $1.15 billion
Issue Senior unsecured notes (144A/Reg S for life)
Coupon 7.75%
Price 100
Yield 7.75%
Spread T+685
Maturity Feb. 15, 2029
Call Non-call three (first call at par plus 50% coupon)
Price talk 8% area
Notes Make-whole at T+50; change of control put at 101; up-to-40%
equity claw at 107.75% until Feb. 15, 2024
Bookrunners Barc (B&D)/JPM/Apollo/CS/C/JEFF/MUFG/RBC/UBS/WF/BC
Trade (date) Jan. 29, 2021
Settle Feb. 12, 2021 (T+10)