Hamilton, Bermuda Signet Jewelers announced Monday it has entered into amended borrowing agreements, following a Nov. 2008 report that it was initiating such talks in light of the significant deterioration in the economic environment.
The goal of the discussions, said Signet, was to provide the group with additional financial flexibility in the medium term, while more appropriately structuring the borrowing facilities required by the significantly lower level of net debt now expected, based on its revised operating and expansion strategies.
The amendments relate to the terms of a $380 million 2013 to 2018 U.S. Private Placement Note Term Series Purchase Agreement entered into on March 30, 2006, and a $520 million unsecured multi-currency, five-year revolving credit-facility agreement entered into on June 26, 2008.
By Jan. 31, the amount drawn under the Facility Agreement was $135.0 million.
Under the amended agreements, Signet will prepay $100 million of the notes at par plus accrued interest on March 18 and the revolving credit agreement is reduced in size to $370 million with immediate effect.
In addition, the margin paid on the revolving credit agreement and the coupon on the notes have been increased.
Walker Boyd, group finance director, said, "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.”