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US luxury goods retailer Neiman Marcus announced on Tuesday that it had completed the refinancing of a substantial portion of its payment facilities with a total of $1.1bn of new 7.125% senior secured notes due 2026, according to a company press release.
The transaction, initially sized at USD 1 billion, was increased to USD 1.1 billion in response to demand from institutional investors.
The company used the net proceeds of the refinancing to repay in full the $123.6 million outstanding amount of its existing term loan facility (first in, last out), the $697.4 million outstanding amount of its existing term loan facility and the $50.8 million outstanding amount of its senior secured floating rate notes due 2025, as well as to pay related interest, premiums and fees.
The Company will use the remaining proceeds for general corporate purposes, including the repayment of the entire $75 million currently outstanding under its $900 million asset-based revolving credit facility.
At the time of repayment, the company will have no further borrowings outstanding under this facility and net debt outstanding will be approximately $850 million after repayment of the asset-based revolving credit facility.
The refinancing did not deleverage the company but simplified its capital structure, reduced interest expense and extended maturities.
“This refinancing validates the momentum we are seeing as we continue to execute our strategic transformation plan in the face of improving market conditions,” said Brandy Richardson, executive vice president and CFO of Neiman Marcus Group. “The confidence of our investors is reflected in the final pricing terms and size of the offering. We have additional financial flexibility as we invest in our supply chain, elevate our digital excellence and deliver unparalleled luxury experiences. “
According to Women’s Wear Daily, which reported on Neiman’s financial actions before they were made public, the bond issue reduced the risk for Neiman’s main lenders, PIMCO, Davidson Kempner Capital Management and Sixth Street, who also became the new owners in a debt-for-stock swap.
Read also > US : INVESTORS TO CONTEST NEIMAN MARCUS BANKRUPTCY LOAN
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