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Debenhams seeks consents to amend 5¼% notes to allow additional debt
By Sarah Lizee
Olympia, Wash., Sept. 3 – Debenhams Retail Ltd. is seeking consents from holders of its outstanding £200 million 5¼% senior notes due 2021 issued by Debenhams plc to approve proposed amendments to the notes, according to an announcement.
On March 29, the company announced that it had put in place £200 million of new facilities with its existing lenders. The availability was linked to some covenants and milestones, which were ultimately not met.
As a result, on April 9, the company entered administration.
“In order to manage its cash flow proactively and maximize the liquidity headroom available to the group in the short to medium term, the group now wishes to amend the trust deed to permit the group to draw up to £50 million of further secured indebtedness and to allow some of its indebtedness to incur interest that capitalizes,” the company said.
The intercreditor agreement already permits the drawing of a further £50 million of debt. Therefore, the company is seeking consents to amend the financial debt covenant and negative pledge in the terms and conditions of the notes to allow the drawing of a further £50 million and to allow some interest to be capitalized.
If drawn, the further £50 million of secured debt will rank pari passu with the new money facility agreement and therefore senior, in terms of payment priority, to the notes.
Prior to launching the consent solicitation, the group has had discussions with holders representing in excess of 50% of the aggregate principal amount of outstanding notes regarding the proposed amendments.
“Based on such discussions, the group believes that such holders intend to vote in favor of the proposed amendments prior to the expiration time,” the company said.
The offer will expire at noon ET on Sept. 6.
Lucid Issuer Services Ltd. (+44 20 7704 0880 or debenhams@lucid-is.com) is the information and tabulation agent.
Debenhams is a London-based department store chain.
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