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Bain Capital and junk bonds

Specialty Retailers, acquired in the late 1980s by Bain Capital, was the buyout firm’s most ambitious and risky deal up to that time. Mitt Romney helped arrange $300 million in junk bond financing with Michael Milken’s investment bank.

1988 Bain Capital invests $10 million to create Houston department store chain Specialty Retailers Inc. It borrows $300 million in junk bonds from Drexel Burnham Lambert to finance the deal.

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1992 Bain’s first effort at an IPO for the company flops.

1993 Company refinances debt, distributes $80 million to Bain and other investors.

Oct. 1996 Company changes name to Stage Stores Inc., goes public at $16.50 a share.

1997 New CEO Carl Tooker takes over and in June buys C.R. Anthony Co., a 246-store chain, nearly doubling the size of the company. By September, Bain sells all its shares at $34.88 and leaves the board. Bain makes a $175 million profit on its investment.

1998 The stock keeps rising, and Bain buys back shares, as a minority investment.

June 1, 2000 Stage files for bankruptcy protection, with $445 million in long-term debt.

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