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Carter’s extends debt maturity profile via February debt refinancing
By Devika Patel
Knoxville, Tenn., April 30 – Carter’s, Inc. extended its debt maturity profile “meaningfully” last quarter through a debt refinancing.
“We took steps in the quarter to further bolster our already strong balance sheet by refinancing our senior notes,” executive vice president and chief financial officer Richard F. Westenberger said Tuesday on the company’s earnings conference call for the first quarter ended March 30.
“We saw outstanding demand for our transaction, and we achieved one of the best interest rate and covenant packages in what has been a fairly choppy high-yield debt market.
“We utilized the proceeds of the transaction to pay off our existing senior notes and to pay down a portion of our outstanding revolver borrowings.
“Our debt maturity profile has been extended meaningfully, and we have substantial current liquidity with cash on hand and available capacity under our credit facility of approximately $775 million.”
The company’s leverage ratio as of March 30 was about 2.5x.
Cash and cash equivalents were $160.15 million as of March 30, compared to $170.08 million as of Dec. 29.
Net long-term debt was $625.28 million as of March 30, compared to $593.26 million as of Dec. 29.
On Feb. 28, Carter’s announced it would redeem its 5¼% senior notes due 2021 and repay some debt under its secured revolver using proceeds of new notes.
Also on Feb. 28, the company priced a $500 million issue of eight-year senior notes (Ba2/BB+) at par to yield 5 5/8% in a quick-to-market sale.
The yield printed tighter than price talk that was in the 5¾% area.
Initial guidance was in the high 5% to 6% area, a trader said at the time, adding that the deal was playing to $1.2 billion of demand.
BofA Merrill Lynch was the lead.
Carter’s is an Atlanta-based marketer of infant's and children's apparel.
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