Bulletin: The Michaels Cos. Inc.'s Higher-Than-Anticipated Proportion Of First-Lien Debt Modestly Pressures Recovery Estimates - S&P Global Ratings’ Credit Research

Bulletin: The Michaels Cos. Inc.'s Higher-Than-Anticipated Proportion Of First-Lien Debt Modestly Pressures Recovery Estimates

Bulletin: The Michaels Cos. Inc.'s Higher-Than-Anticipated Proportion Of First-Lien Debt Modestly Pressures Recovery Estimates - S&P Global Ratings’ Credit Research
Bulletin: The Michaels Cos. Inc.'s Higher-Than-Anticipated Proportion Of First-Lien Debt Modestly Pressures Recovery Estimates
Published Mar 02, 2026
3 pages (1398 words) — Published Mar 02, 2026
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Abstract:

This report does not constitute a rating action. COLUMBIA (S&P Global Ratings) March 2, 2026--S&P Global Ratings today said that The Michaels Cos. Inc.'s (B-/Positive/--) finalized capital structure following its recent refinancing features a higher proportion of first-lien debt than originally contemplated, which modestly pressures our recovery estimates for the company?s term loan and first-lien notes. Michaels' capital structure now comprises a $1.1 billion asset-based lending (ABL) facility due 2031, a $1 billion first-lien term loan B due 2033, $2 billion of 8.5% first-lien secured notes due 2033, and $750 million of 11% second-lien secured notes due 2034. The company's shifting of $200 million to first lien from second lien, while leverage neutral, modestly pressures our recovery estimate for the

  
Brief Excerpt:

...We expect meaningful (50%-70%; rounded estimate: 55%) recovery for Michaels' first-lien term loan and senior secured notes in the event of a payment default or bankruptcy. We expect negligible (0%-10%; rounded estimate: 0%) recovery for the second-lien noteholders....

  
Report Type:

Bulletin

Issuer
Michaels Cos. Inc. (The)
GICS
Specialty Stores (25504040)
Sector
Global Issuers
Country
United States
Region
United States
Format:
PDF Adobe Acrobat
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Cite this Report

  
MLA:
S&P Global Ratings’ Credit Research. "Bulletin: The Michaels Cos. Inc.'s Higher-Than-Anticipated Proportion Of First-Lien Debt Modestly Pressures Recovery Estimates" Mar 02, 2026. Alacra Store. Nov 05, 2026. <http://www.alacrastore.com/s-and-p-credit-research/Bulletin-The-Michaels-Cos-Inc-s-Higher-Than-Anticipated-Proportion-Of-First-Lien-Debt-Modestly-Pressures-Recovery-Estimates-3524598>
  
APA:
S&P Global Ratings’ Credit Research. (). Bulletin: The Michaels Cos. Inc.'s Higher-Than-Anticipated Proportion Of First-Lien Debt Modestly Pressures Recovery Estimates Mar 02, 2026. New York, NY: Alacra Store. Retrieved Nov 05, 2026 from <http://www.alacrastore.com/s-and-p-credit-research/Bulletin-The-Michaels-Cos-Inc-s-Higher-Than-Anticipated-Proportion-Of-First-Lien-Debt-Modestly-Pressures-Recovery-Estimates-3524598>
  
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