Herbalife calls 9½% notes due 2011

By Laura Lutz

Des Moines, July 21 - Herbalife Ltd. said it will redeem its outstanding $165 million 9½% notes due 2011.

The company will pay $109.80 per $100.00 principal amount plus accrued interest for the notes on Aug. 23.

Herbalife will use proceeds from a just-announced $200 million bank loan to pay for the redemption.

Connected to the redemption, the company expects to incur an after-tax one-time charge of $14 million, representing the call premium and the write-off of unamortized deferred financing costs.

"We continue to proactively de-leverage the company reflecting the strong cash flow generation of our business coupled with the creation of a more flexible and efficient capital structure," said Rich Goudis, the company's chief financial officer.

"The result has been a reduction of debt, a lower effective interest rate and improved coverage ratios which led to the recent corporate family credit rating upgrades from both Moody's and S&P to Ba1 and BB+, respectively. The benefits from this recapitalization will allow us to invest further in the needs of our distributors, our business and our shareholders," he continued.

Herbalife is a Los Angeles-based network marketing company offering weight management products, nutritional supplements and personal care products.

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