PRADA CONFIRMS $624M IN BONDS

Byline: Luisa Zargani

MILAN — Prada Group’s bond issue is a go.
The company Wednesday confirmed its intention to go forward with a bond issue valued at $624.1 million. As reported, the bond, issued by Deutsche Bank AG, is a means by which Prada can restructure its debt load of $1.16 billion now that its initial public offering has been put on hold. Dollar figures have been converted from the euro at current exchange rates.
The 3 1/2-year bond carries a fixed interest rate of 1.5 percent and an option to be cashed in if Prada does not seek an IPO within 3 1/2 years. If Prada does goes public, investors can either convert the obligations to stock options or maintain them in bond form for another three years.
The bond will be available to finance ITMD Investments BV (ITMD), the holding company that owns 100 percent of Prada, which will use up to $267.4 million for a capital increase of the group and the remaining sum to pay down its debt.
“This is a very important operation for our group,” said Patrizio Bertelli, chief executive officer of Prada, in a statement. “The new financial resources will allow us to continue to consolidate the labels in our stable, balancing off our financial structure.”
The bond, the price of which will be determined today, will be listed in Luxembourg. It will be held by banks and financial funds outside the U.S., Canada and Japan and not sold on the open market. Deutsche Bank, the only bookrunner, is, with IntesaBci SpA, joint global coordinator. Deutsche Bank, IntesaBci SpA, Barclays Capital and BNP Paribas are joint-lead managers.
Bertelli said that “over the past few weeks, sales have picked up in Europe and the U.S.” At the beginning of December, the company opened a new store in Aspen, Colo., and on Saturday, a Prada store will open in New York’s SoHo area. The company’s Prada Sport store on Wooster Street is expected to close, and its product will be shown in the new downtown flagship.

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