Signet Jewelers: $47 million make-whole amount on prepaid notes equals 2½ years of coupon payments

By Lisa Kerner

Charlotte, N.C., Oct. 29 - Signet Jewelers Ltd. said that in deciding to prepay the remaining $229.1 million total principal amount outstanding of its private placement notes, the company considered a number of financial and operational restrictions imposed by the note agreement.

Specifically, Signet considered the agreement too restrictive and noted the higher interest of 8.12% per year being paid on the notes compared to the relatively low return on the company's invested assets, according to an 8-K filed with the Securities and Exchange Commission.

The required make-whole payment of approximately $47 million equates to two-and-a-half years of coupon payments, while the notes had a weighted average remaining life of five-and-a-half years.

As previously reported, Signet said that prepaying the notes outstanding under its 2013 to 2018 amended U.S. private placement note term series agreement on Nov. 26 will result in a reduction in interest expense of $101.7 million over the remaining term of the notes.

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

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