Carter's to repay $61.3 million of William Carter notes

New York, Oct. 1 - Carter's, Inc. said it plans to redeem $61.3 million principal amount of the 10 7/8% senior subordinated notes due 2011 issued by its William Carter Co. operating subsidiary using proceeds of its initial public offering.

The redemption is expected to need approximately $68.0 million of cash to cover the redemption price of 110.875% of par plus accrued interest.

The Atlanta marketer of baby and young children's clothing expects to raise $68.5 million of proceeds in the IPO, based on 4,687,500 shares at an assumed price of $16.00. The IPO also includes 1,562,500 shares to be sold by selling shareholders.

If the greenshoe of 703,125 shares from Carter's and 234,375 shares from the selling holders is exercised, the proceeds to the company will rise by an estimated $10.4 million. In that case, the company will use $8.4 million to repay $4.2 million of credit facility borrowings under its terms. The facility includes a $118.0 million term loan and a $75.0 million revolving loan facility. The term loan matures Sept. 30, 2008 and carries interest at Libor plus 225 to 275 basis points.

Carter's filed the latest amendment to the IPO with the Securities and Exchange Commission on Wednesday. Goldman, Sachs & Co. is bookrunner for the stock sale.

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