NEW YORK — May Department Stores Co. on Tuesday said it priced $2.2 billion in debt to help pay for its Marshall Field’s acquisition.
This story first appeared in the July 14, 2004 issue of WWD. Subscribe Today.
In a statement, the company said the $2.2 billion in bonds being sold consist of a three-year issue of $400 million, a five-year issue of $600 million, a 10-year issue of $500 million, a 20-year issue of $300 million and a 30-year issue of $400 million.
Yields were set in a range of 1.07 percentage points over treasuries for the three-year bonds to 1.5 percentage points over treasuries for the 30-year bonds.
The $3.24 billion Field’s deal, inked last month with Target Corp. for 62 Marshall Field’s stores and nine Mervyn’s locations, will be financed with total debt of approximately $2.9 billion.
In related news, also on Tuesday, Standard & Poor’s Ratings Services lowered May’s long-term corporate credit rating to “BBB” from “BBB+.” S&P said the downgrade reflects “the impairment to May’s credit quality that will result from its planned debt-financed” purchase. Additionally, S&P affirmed May’s “A-2” short-term rating and said the company’s outlook is stable.
On Monday, Moody’s Investors Service lowered its long-term ratings of May, citing the effect of the Field’s acquisition.
— Dan Burrows