Avon Products amends purchase agreement for $535 million of notes

By Lisa Kerner

Charlotte, N.C., Aug. 20 - Avon Products, Inc. entered into a first amendment to the Nov. 23, 2010 note purchase agreement for its $142 million 2.6% senior notes series A due 2015, $290 million 4.03% senior notes series B due 2020 and $103 million 4.18% senior notes series C due 2022, according to an 8-K filing with the Securities and Exchange Commission.

The amendment provides for a leverage ratio covenant, a most favored lender provision and a 150 basis point step up of the applicable coupon if the company's unsecured and unsubordinated debt is not rated investment grade by a certain number of rating agencies, the filing said.

Also, the amendment provides for a covenant that Avon arrange a quarterly call among the noteholders and its chief financial officer and/or treasurer if requested by the noteholders.

There is also an amendment to the interest coverage ratio to allow the Avon to add back to its consolidated pre-tax income actual non-cash impairment charges related solely to the Silpada business in an amount not to exceed $125 million.

Avon is a beauty products company based in New York.

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