Signet awaits leverage of 4x by year-end 2021, refinancings completed

By Devika Patel

Knoxville, Tenn., Dec. 5 – Signet Jewelers Ltd. expects its leverage ratio to be about 4x by the end of fiscal 2021.

The company completed two refinancing transactions last quarter.

“We entered into new, five-year asset-based credit facilities with availability of $1.6 billion, which replaced the previous revolving credit facility and term loan facility due in 2021 and funded a tender offer for a majority of outstanding senior notes due 2024,” chief financial officer Joan Hilson said on the company’s third quarter ended Nov. 2 earnings conference call on Thursday.

“The refinancing improved our financial flexibility by extending Signet’s debt maturity profile, increasing available liquidity and slightly lowering interest expense while having a neutral impact on leverage.

“We continue to expect our leverage ratio to be approximately 4x by the completion of a transformation plan at year-end fiscal 2021,” she said.

Cash and cash equivalents were $188.6 million as of Nov. 2, compared to $195.4 million as of Feb. 2.

Long-term debt was $788.8 million as of Nov. 2, compared to $649.6 million as of Feb. 2.

On Sept. 5, Signet said it planned to finance its existing facilities with $1.6 billion of new fully committed five-year senior asset-based credit facilities.

Signet expected to enter into the facilities with BofA Securities, Inc., Fifth Third Bank, JPMorgan Chase Bank, NA and PNC Capital Markets LLC as joint lead arrangers and bookrunners and a syndicate of financial institutions and institutional lenders.

Loan proceeds were earmarked to refinance all outstanding amounts under the company’s existing senior credit facilities that mature in July 2021, to refinance subsidiary Signet UK Finance plc’s 4.7% senior notes due 2024, to pay related fees and expenses and for general corporate purposes.

On Oct. 3, Signet UK Finance plc, a wholly owned company subsidiary, announced the completion of its cash tender offer for its 4.7% senior notes due 2024.

By the early deadline, 5 p.m. ET on Sept. 18, the issuer had received valid tenders and consents from holders of $251,873,000, or 62.97%, of the outstanding notes.

As of offer expiration at 11:59 p.m. ET on Oct. 2, the company received additional tenders of notes for $303,000.

Holders who tendered their notes after early tender time will receive a total consideration of $920 per $1,000 of notes plus interest from the most recent interest payment date to but excluding the applicable settlement date.

BofA Securities and J.P. Morgan Securities LLC were dealer managers for the tender offer.

D.F. King & Co., Inc. was the information agent and tender agent.

Signet Jewelers is a Hamilton, Bermuda-based retailer of diamond jewelry.

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