Commentary & Deal Flow

+++Also updates with Moody's and Fitch ratings on the sr unsec PIK toggle tranche+++

Beach Acquisition Bidco LLC (Skechers) (SKX) US$4.25bn equivalent (US$/EUR) 144A/Reg S 3-part. Sr sec notes via JPM (B&D)/Barc/MUFG/BNP/MS/GS/UBS/TD/Scotia/Santaner/Citi/RBC/ING/HSBC/WFS/TSI/BMO/DB/CIBC/USB/Huntington/FITB jt books. Sr PIK toggle notes via JPM sole. No reg rights. SMR at 100 if the acquisition is not completed by 02/28/26. Settles 07/14.

US$1.75bn equivalent (US$/EUR) sr sec notes 1st lien 2-part due 2032 (7y). Ba3/BB-/BB- (positive/stable/stable).

- US$500m minimum due 2032 (7y). NC3. (MWC T+50bp) (50%,25%,par). Equity claw: 3y 40%. Special call: 10% per year the 1st 3 years at 103. CoC at 101. Denoms: 200x1. IPT: 7% area.

- EUR500m minimum due 2032 (7y). NC3. (MWC B+50bp) (50%,25%,par). Equity claw: 3y 40%. Special call: 10% per year the 1st 3 years at 103. CoC at 101. Denoms: 100x1. IPT: 6% area.

$2.5bn sr PIK toggle notes due 2033 (8y). NC3 (104, 101, par). Equity claw: 3y 40%. Caa1/B+/B- (positive/stable/stable). List ISE. CoC at 101. Denoms: 200x1. IPT: 10% cash +75bp if PIK.

Investor call at 10am NYT / 3pm UKT 06/23. Pricing 06/26, concurrently with the term loan. UOP: along with $1.245bn and EUR750m (US$870m equivalent) sr sec term loan Bs (also $1.6bn revolver, undrawn) via JPM +(lender call 10am 06/17, commitments due 5pm NYT/5pm UKT 06/25), to fund the LBO of Skechers USA Inc by 3G Capital for $63.00 per share in cash (or a mixed election consideration of $57.00 and one non-listed equity unit of the parent company of Sketchers' LLC units) or an equity value of $9.4bn (total transaction value of $10.37bn). 3G and rolling shareholders will contribute $4.4bn in equity. Closing of the acquisition is expected in Q3 2025. Biz: global designer and marketer of contemporary casual, active, rugged. sports, and lifestyle footwear. HQ: Manhattan Beach, CA. (Acquisition announced 05/05/2025).