The global manufacturer and seller of apparel essentials for
men, women, and children,
) announced its intention of repaying 50% of its $300.0 million
floating-rate bond debt in July 12, 2012. The company intends to
pay off the entire debt by the end of this year.
The floating rate senior notes are due in 2014, and the company
plans to redeem the notes at a price that will be equivalent to
100% of its principal amount, which comprises the accrued interest
and unpaid till the redemption date.
The company also aims to pay off its $500 million of 8% notes in
2013. The debt repayments are in line with management expectations
to reduce its long-term debt in 2012 and 2013 by using its free
cash flow, as announced at the first quarter conference call. All
these debt repayments are expected to bring down Hanesbrands's
total bond debt to approximately $1.0 billion. Further the
substantial payback of the bond debt would bring down the interest
expense by $15.0 million in 2012,versus 2011 levels.
At the end of the first quarter of 2012, Hanesbrands had $41.6
million of notes payable and $1.9 billion of long-term debt on its
balance sheet. Following the payoff of $150.0 million in July 2012,
the company will have $147.1 million worth of outstanding Floating
Hanesbrands stiffly competes with
Warnaco Group Inc.
Maidenform Brands Inc
Gildan Activewear Inc.
). Currently, we have a Neutral recommendation on
Hanesbrands, which carries a Zacks #3 Rank (short-term Hold
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