Signet Cuts Credit Facility, to Prepay $100 Million of Notes
March 16, 09
Signet Jewelers Ltd announced on Thursday that it has entered into amended borrowing agreements. The company said it has reduced the size of its borrowing facilities “in light of a significant deterioration in the economic environment.”
The firm, the world’s largest specialty retail jeweler, said the goal was to provide it with “additional financial flexibility in the medium term.”
The amendments relate to the terms of a $380 million 2013 to 2018 U.S. private placement notes from March 30, 2006 and a $520 million unsecured multi-currency five year revolving credit facility agreement entered into on June 26, 2008. At January 31, 2009 the amount drawn under the Facility Agreement was $135 million.
Under the amended agreements, Signet will prepay on Wednesday (March 18) $100 million of the notes at par plus accrued interest and the revolving credit agreement is reduced to $370 million.
In addition, the margin paid on the revolving credit agreement and the coupon on the notes have been increased.
The terms of the amended facility agreement include the ability to draw $370 million in the form of multi-currency cash advances and the issuance of letters of credit
According to Group Finance Director Walker Boyd, “The amended borrowing agreements give Signet greater long-term security in its financing and the reduction in facility size more closely matches the future financing requirements of the group.“