NEW YORK — Barneys New York Inc. reported on Wednesday that its offering of senior notes grossed proceeds of $90.1 million.
The offering entailed $106 million of the 9 percent senior secured notes, due April 1, 2008 of its wholly-owned Barney’s Inc. subsidiary, along with warrants to acquire 106,000 shares of Barneys common stock.
Barneys net proceeds from the deal were approximately $81.9 million after deducting commissions, financial advisory fees and estimated expenses of the offering.
The net proceeds were used to repay a substantial portion of the firm’s debt, including certain amounts outstanding under its existing credit facility, and to pay certain deferred rent obligations.
After giving effect to the offering, all of the company’s long-term debt will mature in approximately five years.
In related news, Barney’s also reported the restatement of its existing credit facility led by GE Corporate Financial Services. The new facility, which matures on July 15, 2006, is a $70 million revolving credit line under which Barney’s may borrow up to $66 million subject to a borrowing base test. Borrowing may be increased to $70 million with the consent of the required lenders.
In a statement, chief executive officer Howard Socol said, "Our solid operating results this past year, which are a tribute to the hard work of all of the Barneys associates and the strength of the Barneys New York brand, enabled us to complete our note offering during these challenging times. We have ample availability under the restated credit facility for our working capital needs and with our new long-term financing in place, we have a sound capital structure that enables us to execute our future business plans."
The notes and warrants were sold in a private placement to qualified institutional investors.
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