UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

 


 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of report (Date of earliest event reported): May 23, 2018

 

THE MICHAELS COMPANIES, INC.
(Exact Name of Registrant as Specified in Charter)

 

Delaware
(State or Other Jurisdiction
of Incorporation)

 

001-36501
(Commission
File Number)

 

37-1737959
(IRS Employer
Identification No.)

 

8000 Bent Branch Drive

Irving, Texas   75063

(Address of Principal Executive Offices) (Zip Code)

 

Registrant’s telephone number, including area code: (972) 409-1300

 


 

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):

 

☐        Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐        Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐        Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐        Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Emerging growth company     

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.     

 

 

 


 

Item 1.01.     Entry into a Material Definitive Agreement.

On May 23, 2018, Michaels Stores, Inc. (“MSI”), as borrower, and Michaels Funding, Inc. and certain of MSI’s subsidiaries, as guarantors, entered into a Third Amendment to Amended and Restated Credit Agreement (the “Amendment”) with JPMorgan Chase Bank, N.A., as successor administrative agent and successor collateral agent under the Term Loan Facility (as defined below), the 2018 Converting Replacement Term B Loan Lenders (as defined in the Amendment), the 2018 New Replacement Term B Loan Lenders (as defined in the Amendment), certain lenders constituting the Required Lenders (as defined in the Term Loan Facility), Deutsche Bank AG New York Branch, as resigning administrative agent and resigning collateral agent, and JPMorgan Chase Bank, N.A., Wells Fargo Securities, LLC, Deutsche Bank Securities Inc. and Goldman Sachs Bank USA, as joint lead arrangers and joint bookrunners, which amends MSI’s senior secured term loan facility (the “Term Loan Facility” and the Term Loan Facility, as amended by the Amendment, is referred to herein as the “Amended Term Loan Facility”).

 

The Amendment reduces the applicable margin for the loans under the Amended Term Loan Facility by 0.25% to 1.50% with respect to base rate borrowings and 2.50% with respect to Eurocurrency borrowings.  The Amended Term Loan Facility provides for a 1.0% soft call premium applicable to the loans in connection with certain repricing transactions occurring on or prior to the six month anniversary of the effective date of the Amendment.

 

Under the Amended Term Loan Facility, MSI has the right to request additional term loans (a) in an aggregate amount of up to $750 million and (b) an amount of term loans requested by MSI so long as MSI’s consolidated secured debt ratio (as defined in the Amended Term Loan Facility) is no more than 3.25 to 1.00 on a pro forma basis as of the last day of the most recently ended four quarter period.  The lenders under the Amended Term Loan Facility will not be under any obligation to provide any such additional term loans and the incurrence of any additional term loans is subject to customary conditions precedent.

 

The above summary of the Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendment, a copy of which is attached as Exhibit 10.1 to this Current Report on Form 8-K, which is incorporated by reference into this Item 1.01.

 

Certain lenders under the Amended Term Loan Facility, have engaged in, or may in the future engage in, transactions with, and perform services for, MSI and its affiliates in the ordinary course of business.

 

Item 2.03.     Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.

Item 9.01.     Financial Statements and Exhibits.

(d)Exhibits.

 

 

 

Exhibit
Number

 


Description

10.1

 

Third Amendment to Amended and Restated Credit Agreement, dated as of May 23, 2018, among Michaels Stores, Inc., Michaels Funding, Inc., various subsidiaries of Michaels Stores, Inc., JPMorgan Chase Bank, N.A., as successor administrative agent and successor collateral agent, Deutsche Bank AG New York Branch, as resigning administrative agent and resigning collateral agent, the 2018 Converting Replacement Term B Loan Lenders (as defined therein), the 2018 New Replacement Term B Loan Lenders (as defined therein), the lenders party thereto and the other agents named therein.

 

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SIGNATURE

 

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.

 

 

THE MICHAELS COMPANIES, INC.

 

 

 

 

 

 

 

By: 

/s/ Denise Paulonis

 

 

Denise Paulonis

Executive Vice President – Chief Financial Officer

(Principal Financial Officer)

 

 

Date: May 23, 2018

 

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