Spotless Group completes US$160 million note placement

Friday 19th November 2010

Spotless Group, the Australian dry cleaning and laundry chain, has secured the issue of US$160 million of guaranteed senior notes in the U.S. Private Placement debt market, with the proceeds being put towards paying off bank debt.

The notes, which are expected to be issued in December in three tranches, consist a US$50 million of 12-year notes with a coupon of 4.56%, US$50 million of 15-year notes at 4.81%, and US$60 million of 20-years notes with a fixed coupon value of 5.99%.

“The preparedness of investors to subscribe to long dated funding is a strong endorsement of the company’s programme of transformation and confidence in future performance,” said managing director and chief executive Josef Farnik. “We have strengthened our financial position by diversifying our sources of funding and significantly reduced refinancing risk.”

The proceeds under the note issue will be swapped from U.S. dollars into Australian dollars at a fixed interest rate to remove the foreign exchange and interest rate exposure, and will be undertaken at the time of issue.

After the placement, Spotless will have US$290 million in U.S. Private Placement notes at fixed interest rates with maturities ranging from 2013 to 2030. The company also has a A$240 million syndicated debt facility at floating rates maturing in March 2012.

Shares were unchanged at $3.87 on the NZX, and were last at A$2.13 on the ASX.

(BusinessDesk)

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