GFSI swaps stock for 11 3/8% notes, also buys further notes

New York, Oct. 2 - GSFI Holdings Inc. (B3) said that it had issued shares of its common and preferred stock in exchange for $30 million principal amount at maturity of its 11 3/8% senior discount notes. The shares were issued to certain members of the company's management team who had purchased the notes directly from the noteholders.

GSFI - the Lenexa, Kan.-based parent of athletic apparel maker Gear For Sports Inc. - said that upon completion of the transaction, management stockholders now hold approximately 90% of the GFSI's outstanding equity.

GFSI also announced that concurrently with the stock-for-debt transaction, Gear For Sports purchased an additional $30 million principal amount at maturity of the notes.

Combined with management's acquisition of the notes which were later swapped for equity, the two transactions resulted in $60 million of the notes being purchased by GFSI and its subsidiary, leaving $24 million principal amount at maturity in the hands of third-party noteholders.

The company borrowed approximately $11.6 million from its existing revolving credit facility in order to finance its purchase and pay related transaction fees.

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