SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 20, 2012
Claires Stores, Inc.
(Exact name of registrant as specified in its charter)
Registrants telephone number, including area code: (847) 765-1100
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Third Supplemental Indenture
On September 20, 2012, Claires Stores, Inc. (the Company) completed an offering of $625 million aggregate principal amount of 9.00% senior secured first lien notes due 2019 pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended (the Securities Act). The notes were sold at 102.5% of the aggregate principal amount thereof, resulting in gross proceeds (excluding accrued and unpaid interest) of $640,625,000. The notes are of the same series as the Companys outstanding $500 million aggregate principal amount of 9.00% senior secured first lien notes due 2019. The terms of the notes, other than their issue date and issue price, are identical to the previously issued notes. As a result of the closing of this offering, the aggregate principal amount of the Companys 9.00% senior secured first lien notes due 2019 outstanding is $1.125 billion.
The notes were issued by the Company pursuant to that certain Indenture, dated as of February 28, 2012, by and among the Company, the Guarantors named therein and the The Bank of New York Mellon Trust Company, N.A., as trustee and collateral agent, as supplemented by the First Supplemental Indenture, dated as of March 2, 2012, the Second Supplemental Indenture, dated as of March 12, 2012, and the Third Supplemental Indenture (the Third Supplemental Indenture), dated as of September 20, 2012, which provided for the issuance of the notes. A copy of the Third Supplemental Indenture is filed as Exhibit 4.1 to this Form 8-K and incorporated by reference herein.
The Company used the net proceeds of the issuance of the notes, together with cash on hand, to repay in full the term loan indebtedness under its senior secured credit facility. In addition, as described below, the Company replaced its existing senior secured revolving credit facility with an amended and restated $115.0 million five-year senior secured revolving credit facility.
Amended and Restated Credit Agreement
On September 20, 2012, the Company entered into an Amended and Restated Credit Agreement by and among Claires Inc. (Parent), the Company, Credit Suisse AG, as Administrative Agent, and the other Lenders named therein (the New Credit Facility), pursuant to which the Company replaced its existing $200.0 million senior secured revolving credit facility maturing May 29, 2013 with a $115.0 million five-year senior secured revolving credit facility.
Borrowings under the New Credit Facility will bear interest at a rate equal to, at the Companys option, either (a) an alternate base rate determined by reference to the higher of (1) prime rate in effect on such day, (2) the federal funds effective rate plus 0.50% and (3) the one-month LIBOR rate plus 1.00%, or (b) a LIBOR rate with respect to any Eurodollar borrowing, determined by reference to the costs of funds for U.S. dollar deposits in the London Interbank Market for the interest period relevant to such borrowing, adjusted for certain additional costs, in each case plus an applicable margin of 4.50% for LIBOR rate loans and 3.50% for alternate base rate loans. The Company will also pay a facility fee of 0.50% per annum of the committed amount of the New Credit Facility whether or not utilized.
All obligations under the New Credit Facility are unconditionally guaranteed by (i) Parent, prior to an initial public offering of the Companys stock, and (ii) certain of the Companys existing and future wholly-owned domestic subsidiaries, subject to certain exceptions.
All obligations under the New Credit Facility, and the guarantees of those obligations, are secured, subject to certain exceptions, by (i) all of the Companys capital stock, prior to an initial public offering of its stock, and (ii) substantially all of the Companys material owned assets and the material owned assets of subsidiary guarantors, including:
The New Credit Facility contains customary provisions relating to mandatory prepayments, voluntary payments, affirmative and negative covenants, and events of default; however, it does not contain any covenants that require the Company to maintain any particular financial ratio or other measure of financial performance except that so long as the revolving loans and letters of credit outstanding exceed $15 million, the Company will be required to comply with a maximum Total Net Secured Leverage Ratio of 5.5 to 1.0 based upon the ratio of its net senior secured debt to adjusted earnings before interest, taxes, depreciation and amortization for the period of four consecutive fiscal quarters most recently ended.
The foregoing description of the New Credit Facility is qualified in its entirety by reference to the complete copy of such agreement that is filed as Exhibit 10.1 to this Form 8-K and incorporated by reference herein.
On September 20, 2012, the Company completed an offering of $625,000,000 aggregate principal amount of 9.00% senior secured first lien notes due 2019. The Company used the net proceeds of the issuance of the notes, together with cash on hand, to repay in full the term loan indebtedness under its senior secured credit facility. The description of the offering of the notes contained in Item 1.01 above is hereby incorporated by reference into this Item 2.03.
On September 20, 2012, the Company issued a press release announcing the issuance of the notes. A copy of the press release is attached as Exhibit 99.1 and is incorporated by reference into this Item 8.01.
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.