RH repays $100 million second-lien loan to reduce interest expense

By Marisa Wong

Morgantown, W.Va., Oct. 10 – RH announced it repaid its $100 million second-lien term loan.

The annualized cash interest rate on the second-lien term loan was about 9.5% as of Oct. 10, the date of retirement.

The company said it funded the repayment with borrowings on its asset-backed credit facility, which currently bears annualized interest of roughly 2.75%, as well as existing cash on its balance sheet.

“We are retiring the second lien term loan just over three months after securing it. The $100 million second lien term loan was intended to act as a short term bridge loan to help fund the company’s purchase earlier this year of nearly one-half of its outstanding shares,” Gary Friedman, RH chairman and chief executive officer, said in a press release.

As a result of the early repayment of the second-lien term loan and related reduction in interest expense, the company expects an incremental $0.05 benefit to its fiscal 2017 adjusted diluted earnings per share.

RH is a Corte Madera, Calif.-based curator and retailer of luxury home furnishings.

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