British high street champion New Look is said to have hired HSBC Holdings Plc and Royal Bank of Scotland Group Plc to coordinate plans to extend its debt maturity. News arose a week ago when New Look sought after senior lenders to re-arrange
their repayment timings.
company may seek lender approval to extend the maturity of its term loan B and term loan C by about 15 to 18 months and the second-lien loans by three months to April 2015. The retailer, which has net debt of about £1bn, has been in discussions with lenders for some time and further refinancing is likely as the retailer´s chief executive Alistair McGeorge is determined to wants to renovate New Look’s capital structure to reaffirm the business.
According to two people with knowledge of the matter who talked to Bloomberg, New Look may offer to increase the interest margin on B and C tranches to about 475 basis points, said the people. The company is also considering extending the maturity of its revolving credit, the people said. A basis point is 0.01 percentage point.
The company doesn’t plan to change the covenants of its debt, the sources said. An official in London for New Look, who wouldn’t be identified, declined to comment, reported Bloomberg.
New Look may also offer to prepay 75 million pounds of cash-pay debt at par, and an additional 25 million pounds would be earmarked to buy back payment-in-kind debt at a discount if the London-based retailer reduces borrowings to two times earnings before interest, tax, depreciation and amortization from 2.6 times currently, the people said.