Burlington Raising $1.5 Billion New Debt But Only 1/3 Goes to Bain Dividend

Earlier this week, I reported on Burlington Coat Factory’s plan to pay a dividend to its PE shareholders, namely Bain Capital. Burlington Coat Factory is raising $1.5 billion in new debt. The company is selling $500 million in unsecured notes and is in the market for a $1 billion term loan.

Of the $1.5 billion, I’m hearing from a source that about $300 million will go to pay a dividend to Bain. The rest is expected to be used to repay debt.

Bain acquired Burlington Coat Factory, which sells coats and women’s sportswear, in 2006 for $2.06 billion.

HCA announced yesterday it would be paying a $2 billion dividend to its shareholders, which include KKR and Bain. That’s in addition to the $2.25 billion in dividends HCA paid its shareholders earlier this year. While the $4.25 billion may seem large, I’m told to expect many more dividend deals in the next few weeks. PE firms are looking to take distributions before the impending tax changes at the end of the year.

“If you’re not out there, it will be difficult to get the deal done,” a banker says.

Bain declined comment.