Market conditions deter Carter's from junk-funding OshKosh B'Gosh buy: Carter's spokesman

By Paul A. Harris and Sara Rosenberg

St. Louis, May 11 - The present sell-off in the high-yield market has deterred Carter's, Inc. from using junk bonds to refinance its debt and funding the acquisition of OshKosh B'Gosh Inc., although the company may return should conditions improve, says Eric Martin, vice president of investor relations for Carter's.

"We will be keeping an eye on rates, and we may in fact come to the bond market as the closing of this acquisition approaches," Martin told Prospect News on Wednesday, noting that the deal is expected to close early in the third quarter of 2005.

"Some of our financing models included bonds," Martin added, "However the present conditions in the high-yield market have deterred us.

"So our plans are to refinance debt and fund the acquisition, both, in the bank loan market."

Carter's Inc. will be approaching the loan market with a proposed $625 million credit facility, company officials revealed in a conference call Wednesday morning. Banc of America Securities LLC and Credit Suisse First Boston are the lead banks on the deal.

Currently, Carter's has about $50 million outstanding under its existing senior credit facility that will be refinanced through this new deal.

Carter's also has obligations to holder of its 10.875% senior subordinated notes of about $114 million.

Under the acquisition agreement, Carter's will pay $26.00 per share in cash for each share of OshKosh common stock outstanding for total consideration of about $312 million.

Carter's is an Atlanta-based marketer of children's apparel for ages that range from newborn to six years old. OshKosh is an Oshkosh, Wis.-based marketer of children's apparel and accessories.

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