Hudson’s Bay to repay $1.2 billion of term loan with mortgage debt

By Sara Rosenberg

New York, Nov. 24 – Hudson’s Bay Co. plans on paying down about $1.2 billion of its first-lien term loan with proceeds from a $1.25 billion 20-year mortgage on the ground portion of its Saks Fifth Avenue flagship in New York City, according to a news release.

The mortgage loan is expected to have a fixed interest rate of less than 4.4%, whereas the term loan has a rate of Libor plus 475 basis points, resulting in a reduction to annualized cash interest expense of at least C$5 million, the release said.

Also, pro forma for the transaction, the weighted-average term to maturity of the company’s funded debt is 11.5 years, versus 5.3 years prior to the refinancing.

Closing is anticipated to occur in early December.

Hudson’s Bay is an Ontario-based operator of department stores.

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