NEW YORK, March 13, 2013 /PRNewswire/ -- Avon Products, Inc. (NYSE: AVP) today announced that the company has completed refinancing activities, including the completion of a public offering of $1.5 billion in notes. The company also entered into a $1 billion four-year unsecured Revolving Credit Facility Agreement, which replaces the previous $1 billion Revolving Credit Facility Agreement.
"Through this refinancing, we have achieved increased financial flexibility, which is critical to our ability to successfully execute Avon's turnaround," said Kimberly Ross, Executive Vice President & Chief Financial Officer, Avon Products, Inc. "Our refinancing activities have improved our balance sheet, and we are pleased with the outcome."
In summary, the company has taken or anticipates taking the following actions to improve the health of its balance sheet:
- entered into a new four-year $1 billion unsecured Revolving Credit Facility Agreement, replacing the previous $1 billion Revolving Credit Facility Agreement,
- issued $1.5 billion of unsecured notes generating net proceeds of $1.48 billion (after transaction costs) with maturities of 3, 7, 10 and 30 years,
- repaying $1.9 billion of debt including:
- $380 million of the $550 million term loan
- $125 million 4.625% Notes due May 15, 2013 at maturity
- $535 million private notes (plus make-whole)
- anticipated redemption of $500 million 5.625% Notes due 2014 (plus make-whole)
- $250 million 4.80% Notes due March 1, 2013 paid with cash on hand,
- utilizing $400 million in cash to reduce leverage, and
- negotiated covenants to now provide necessary flexibility to support the turnaround.
The company expects interest expense in 2013 to increase approximately 10% as compared to 2012 as it extended its maturity profile and decreased reliance on floating rate debt. In addition, interest expense will be impacted by one-time charges associated with make-whole premiums related to the prepayment of the private placement notes of $65 million and $25 million if the company prepays its Notes due in 2014.About Avon Avon, the company for women, is a leading global beauty company, with nearly $11 billion in annual revenue. As the world's largest direct seller, Avon is sold through more than 6 million active independent Avon Sales Representatives. Avon products are available in over 100 countries, and the product line includes color cosmetics, skincare, fragrance, fashion and home products, featuring such well-recognized brand names as Avon Color, ANEW, Skin-So-Soft, Advance Techniques, and mark. Learn more about Avon and its products at www.avoncompany.com. This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of any securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.