Global manufacturer and seller of apparel essentials,
) announced that it will initiate the completion of repayment of
its roughly $300.0 million floating-rate bond debt due 2014.
The company had started the process of repayment in July 2012,
when it paid 50% of its Floating Rate Senior Notes due 2014 worth
$150 million on July 12, 2012. The company expects to repay the
remaining 50% worth $147.1 million on Oct. 17, 2012.
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.
At the end of the second quarter of 2012, Hanesbrands had $1.7
billion of long-term debt on its balance sheet with a debt to
capital ratio of 71.6%.
The company also aims to pay off its $500 million 8% notes in
2013. The debt repayments are in line with management's
expectations to reduce its long-term debt in 2012 and 2013 by using
its free cash flow.
In July 2012, Hanesbrands successfully negotiated an amendment
to its revolving loan facility credit agreement that reduced the
company's revolving loan facility borrowing rate by 100 basis
points. It also reduced its unused revolver fee by 15 basis points.
The agreement extends the revolver's maturity period initially to
September 2016 and could eventually extend it to July 2017.
In conjunction with its presentation at the Goldman Sachs Global
Retailing Conference, Hanesbrands has reaffirmed its 2012 guidance
for continuing operations of $2.50 to $2.60 of earnings per diluted
share, net sales of $4.52 billion to $4.57 billion, and free cash
flow of $400 million to $500 million.
The Zacks Consensus Estimate is pegged at $2.56 for the full
Hanesbrands competes against
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 rating).
GILDAN ACTVWEAR (GIL): Free Stock Analysis
HANESBRANDS INC (HBI): Free Stock Analysis
MAIDENFORM BRND (MFB): Free Stock Analysis
WARNACO GRP INC (WRC): Free Stock Analysis
To read this article on Zacks.com click here.