New Look launches £1.2bn bond issue to repay high interest Pik loans

 
Catherine Neilan
Follow Catherine
New Look hoping to pay off its
New Look is launching a bond issue totalling £1.2bn to restructure its debt and pay off its high-interest loans as it transitions to new owners.
The group, which has recently been bought out by South African tycoon Christo Wiese, is issuing £1bn-worth of senior secured notes due in 2022 and £200m senior notes due in 2023.
The cash is being “primarily” used to pay down its £1.1bn debt “and will not be used to finance the acquisition of the equity in New Look by [Wiese's company] Brait”. The £780m takeover deal was agreed last month.
Once the acquisition has gone through the proceeds are expected to be able to redeem the £500m-worth of 8.75 per cent secured senior notes as well as $250m for 8.375 per cent senior secured notes and €175m of floating rate senior secured notes.
All three types of bond were due in 2018, and were issued by New Look Bondco in May 2013.
It will also be used to repay New Look's existing £380m Pik (payment in kind) loans, which have been the challenging debt burden for the business because of the high interest rates they carry. It will also settle its currency hedging obligations and pay costs, fees and expenses covering the acquisition.
The bonds are only being offered to qualified institutional buyers and non-US persons.
New Look has faced an uphill battle to get rid of its growing debt pile accumulated under its private equity owners Apax and Permira, which it had tried to address in the run up to a flotation.
The 2013 issue was seen as buying the retailer some all-important time to turn the business around under chief executive Anders Kristiansen, who had joined the business shortly before.

Related articles