Claire’s Stores Inc. said it intends to offer senior secured notes due 2019.

The company said it intends to use the proceeds from the offering to pay down debt under the firm’s credit facility, which matures in May 2014.


Ratings agency Standard & Poor’s said it is assigning a “B” issue-level rating to the $400 million senior secured first-lien notes. It said the stable outlook for the company reflects its view that performance is likely to “rend modestly positive” over the near term on further growth in North America, even though there’s some weakness in the European segment.

Standard & Poor’s credit analyst David Kuntz said the firm will “remain highly leveraged, with thin cash-flow protection.”

Competing ratings agency Moody’s Investors Service has rated the notes at “B3.” Moody’s said that after the closing of the proposed notes, the term loan outstanding amount will be reduced to $764 million. Moody’s estimated Claire’s annual volume at $1.5 billion.

Claire’s is a value-priced jewelry and accessories retailer targeting teens. It operates 2,981 stores and franchises 395 stores in North America and Europe.

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