Coach Owner Kicks Off Bond Sale to Repay Loans After Scrapped Deal
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(Bloomberg) -- The owner of Coach and Kate Spade brands, Tapestry Inc., tapped the investment-grade bond market Wednesday, for the first time after being forced to abandon its acquisition of Capri Holdings Ltd.
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The retailer sold $1.5 billion of bonds in two parts after sounding out investors a day earlier, according to a person familiar with the matter. The longest portion of the deal, a 10-year note, yields 1.32 percentage point over Treasuries, said the person, who asked not to be identified as the details are private. Early discussions were in the area of 1.6 percentage point.
Proceeds from the sale will be used to repay the $750 million term loan and $1 billion of borrowings under a revolving credit facility it used to fund the share repurchases it announced after its Capri acquisition was blocked.
Bank of America Corp., JPMorgan Chase & Co. and Morgan Stanley led the new bond sale.
A representative for Tapestry didn’t respond to a request for comment.
Tapestry’s $8.5 billion deal with Capri, the owner of the Michael Kors and Versace labels, was scuttled after a court order froze the proposed combination on concerns it would hurt competition in the market for branded handbags. The company was then forced to buy back $6.1 billion of bonds it sold to fund the purchase.
Tapestry last borrowed from high-grade debt market about a year ago when it was looking to fund the acquisition. It sold $4.5 billion of US dollar-denominated and €1.5 billion of euro-denominated notes in maturities ranging from two years to 10 years.
(Updates to show deal has priced.)
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