Signet lifts coupon on $380 notes by 200 bps, to prepay $100 million

By Susanna Moon

Chicago, March 16 - Signet Jewelers Ltd. said it entered into amended borrowing agreements to prepay $100 million of its $380 million private placement note at par plus accrued interest on March 18.

The term series purchase agreement was entered into on March 30, 2006.

The original note purchase agreement took the form of fixed-rate investor certificate notes. The notes represent seven-, 10- or 12-year maturities, with $100 million series A 5.95% due 2013; $150 million series B 6.11% due 2016 and $130 million series C 6.26% due 2018.

The financial covenants of the original note purchase agreement were substantially the same as in the original facility agreement.

The terms of the amended agreement also includes the following:

• Raises the coupon by an additional 200 basis points, subject to a further 100 bps increase until fiscal 2013 if the amended fixed-charge coverage ratio is less than 1.6:1, and an additional 100 bps increase if noteholders are subject to increased capital charges as a result of a requirement to post additional reserves under applicable insurance regulations, as determined by the insurance regulator;

• Subsequent prepayment offers at par are to be made in February of 2010, 2011, 2012 and 2013. The minimum amount of each offer is the noteholders' pro rata share of 60% of any reduction in net debt that occurred over the preceding fiscal year. Any proportion of the 2011, 2012 or 2013 offers rejected by noteholders may be applied to shareholder returns, as defined in the amended facility agreement; and

• Subsequent to January 2013, shareholder returns may only be made if total offers to prepay of $190 million of the notes have been made, and that an additional prepayment offer at a 2% premium to par has also been made, in which case the shareholder returns may be no greater than the proportion of the additional offer rejected by the noteholders.

Signet is a specialty retail jeweler based in Hamilton, Bermuda.

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