Avon Products closes on $500 million term loan due 2015

By Marisa Wong

Madison, Wis., July 5 - Avon Products, Inc. entered into a $500 million term loan agreement on June 29 with Citibank, NA as administrative agent, according to an 8-K filed Thursday with the Securities and Exchange Commission.

Citigroup Global Markets Inc., Santander Investment Securities Inc., Goldman Sachs Bank USA and BBVA Compass are the joint lead arrangers and joint bookrunners.

The credit facility has a $250 million accordion feature.

Borrowings bear interest at Libor plus an applicable margin of 125 basis points to 275 bps, depending on the company's ratings.

The loan is available for general corporate purposes, including funding and payment of debt.

According to the filing, Avon borrowed $500 million on the closing date. The company is required to repay (i) on June 29, 2014 an amount equal to 25% of the total principal amount of loans made on the closing date and (ii) on June 29, 2015, the maturity date, the then outstanding principal amount of loans made under the agreement.

The credit agreement also requires the company to prepay 50% of net cash proceeds from any incurrence of debt for borrowed money in excess of $500 million. Voluntary prepayments of the term loan are permitted at any time without fees.

Avon is a beauty products company based in New York.

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