Rafaella buys back $28.5 million more senior secured notes in August

By Jennifer Chiou

New York, Nov. 14 - Rafaella Apparel Group, Inc. purchased at a discount $28.5 million more of its outstanding senior secured notes on the open market in August, according to a 10-Q filed with the Securities and Exchange Commission.

As a result, the company recorded a pre-tax gain of about $17.6 million.

In addition, the company bought back $8.03 million of the notes in June.

As previously reported, Rafaella purchased $6 million of the notes at a discount in January 2008 for a pre-tax gain of about $700,000.

As already noted, within 100 days after the end of each fiscal year, beginning with the fiscal year ended June 30, 2006, the company is required to make an offer to repurchase senior secured notes at 101% of the principal amount at maturity, plus interest to the date of purchase, with 50% of Rafaella's excess cash flow.

During November 2007 and November 2006, the company repurchased $221,000 and $17.43 million in notes, respectively. The November 2007 and 2006 repurchases approximated $234,000 and $18.4 million, respectively.

Engomi, Cyprus-based Rafaella manufactures intimate apparel.

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