Upscale home furnishings retailer repays second lien term loan
RH has repaid its second lien term loan — in just over three months after securing it.
The upscale home furnishings retailer said that it has repaid its $100 million second lien term loan on Oct. 10. The annualized cash interest rate on the second lien term loan was approximately 9.5% as of the date of retirement.
The company funded the repayment with borrowings on its asset backed credit facility, which bears current annualized interest of approximately 2.75%, as well as existing cash on its balance sheet. Between repaying the loan early, and having a related reduction in interest expenses, RH expects an incremental $0.05 benefit to its fiscal 2017 adjusted diluted earnings per share, the company said.
“Based on our strong business performance, significant cash flow generation, and confidence in our future outlook, we are retiring the second lien term loan just over three months after securing it,” said Gary Friedman, RH chairman and CEO.
“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, which has created, and we believe will continue to create, significant shareholder value,” he added. “The early debt retirement is expected to be incremental to the company’s fiscal 2017 adjusted diluted earnings per share by approximately $0.05.”
The upscale home furnishings retailer said that it has repaid its $100 million second lien term loan on Oct. 10. The annualized cash interest rate on the second lien term loan was approximately 9.5% as of the date of retirement.
The company funded the repayment with borrowings on its asset backed credit facility, which bears current annualized interest of approximately 2.75%, as well as existing cash on its balance sheet. Between repaying the loan early, and having a related reduction in interest expenses, RH expects an incremental $0.05 benefit to its fiscal 2017 adjusted diluted earnings per share, the company said.
“Based on our strong business performance, significant cash flow generation, and confidence in our future outlook, we are retiring the second lien term loan just over three months after securing it,” said Gary Friedman, RH chairman and CEO.
“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, which has created, and we believe will continue to create, significant shareholder value,” he added. “The early debt retirement is expected to be incremental to the company’s fiscal 2017 adjusted diluted earnings per share by approximately $0.05.”