Guess? privately swaps some 2% convertible notes to extend maturity

Chicago, April 13 – Guess?, Inc. announced that it privately worked with noteholders to retire approximately $185 million of the existing 2% convertible notes due 2024, according to a press release.

The company privately negotiated with holders to exchange $184.9 million of their existing notes for $161.4 million of new 3.75% convertible senior notes due 2028 and $33.3 million in cash, representing accrued interest and other consideration for the existing notes.

The same noteholders are purchasing an additional $113.6 million of the new 3.75% convertible notes.

After the exchange, there will be $115 million of the notes due 2024 outstanding.

In connection with the exchange and subscription offering, the company also engaged in share repurchase transactions, whereby the company agreed to repurchase 2,237,872 of its outstanding shares of common stock for $42.5 million in cash, at a price per share of $19.00, the stock’s closing pricing on April 12.

In connection with the exchange transactions, the company expects that holders of existing convertible notes that participate in the exchange transactions will seek to sell the company’s common stock and/or enter into various derivative positions with respect to the company’s common stock to establish hedge positions with respect to the new convertible notes.

Guess? also intends to unwind convertible note hedge and warrant transactions, the existing call spread transactions, in connection with the existing convertible notes.

Guess? is a Los Angeles-based designer, marketer and distributor of casual apparel and accessories.

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