Rafaella buys back $9.4 million notes at discount in past quarter

By Susanna Moon

Chicago, Feb. 22 - Rafaella Apparel Group, Inc. purchased $5 million of its outstanding senior secured notes on the open market at a discount in November and $4.4 million of its outstanding notes at a discount in December, according to a 10-K filed with the Securities and Exchange Commission.

The company said it recorded a pre-tax gain on the notes of about $5.5 million for the quarter ended Dec. 31, resulting from the difference between the carrying book value of the senior secured notes and the amount paid, net of deferred financing costs that were written off at the time of purchase.

Rafaella said it purchased at a discount $3.5 million of outstanding senior secured notes on the open market in July 2009 and recorded a pre-tax gain of about $2.5 million for the quarter ended Sept. 30.

The company purchased at a discount $28.5 million, $2 million, $4 million and $4.4 million of outstanding senior secured notes on the open market in August 2008, March 2009, April 2009 and May 2009, respectively. The pre-tax gain was about $25.6 million for the year ended June 30, 2009.

Rafaella makes women's career and casual sportswear separates and is based in New York.

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