Advertisement
 

HanesBrands Raises 2013 EPS Outlook

Company to Prepay Half of its $500 Million 8% Notes a Year Earlier Than Planned by Using Make-whole Provision

November 30, 2012

HanesBrands Inc. on November 29 announced that it will use its strong cash position to reduce long-term debt this year by another $250 million and reduce interest expense in 2013 by prepaying half of its $500 million of 8 percent senior notes, due 2016, a year earlier than originally anticipated.

The redemption of the bonds on December 27 will reduce the company’s total bond debt to $1.25 billion, and the company’s year-end long-term debt is expected to be less than 2.5 times earnings before interest, taxes, depreciation and amortization, a significant achievement in leverage reduction since the company’s 2006 spinoff.

By using a make-whole provision that is part of the bond indenture, the company has determined that it can prepay its 8 percent notes now with no additional interest and call premiums than if it waited to retire the bonds in December 2013.

“We have a substantial amount of cash on hand now as a result of strong cash flow in 2012, we are committed to reducing our debt and we have determined there is no benefit or need to wait to start prepaying our 8 percent notes,” Hanes chairman and CEO Richard A. Noll said. “With this debt payment, the era of being a highly leveraged company is a thing of the past.”

The company expects to take a pretax charge of approximately $34 million in the fourth quarter of 2012 for bond prepayment expenses due through December 15, 2013, and for acceleration of noncash unamortized debt costs.

For more information, visit www.hanesbrands.com.


 

COMMENTS

Click here to leave a comment...
Comment *
Most Recent Comments: