L Brands Announces Pricing of Upsized $600 Million Offering of 4.625% Senior Notes Due 2029 and $400 Million Term Loan Credit...
June 30 2021 - 6:26PM
L Brands, Inc. (“
L Brands”) (NYSE: LB) announced
today that the previously announced offering by its subsidiary,
Victoria’s Secret & Co. (“
Victoria’s Secret”),
of $500 million aggregate principal amount of senior notes due 2029
(the “
Notes”) was upsized to an aggregate
principal amount of $600 million and priced with a coupon of 4.625%
in a private placement offering to eligible purchasers. The initial
offering price of the Notes to investors will be 100% of their
principal amount. Additionally, L Brands announced today that the
previously announced syndication by Victoria’s Secret of term loans
in an aggregate principal amount $400 million (the “
Term
Loan Facility”) has allocated with an initial margin of
LIBOR (with a LIBOR floor of 0.50%) plus 3.25%. The Term Loan
Facility will have an original issue discount of 1.00%. The
offering of the Notes is expected to close on July 15, 2021,
subject to customary closing conditions. The Term Loan Facility is
expected to close at or about the time of the Separation (as
defined below). Victoria’s Secret is a recently formed company,
which L Brands intends to separate from its current business by
means of a spin-off to its shareholders (the
“
Separation”).
Prior to the completion of the Separation,
Victoria’s Secret intends to use the net proceeds from the offering
of the Notes and the initial borrowing under the Term Loan
Facility, after deducting discounts and commissions to the initial
purchasers of the Notes and estimated offering expenses, to fund a
portion of a cash payment to L Brands. Pending completion of the
Separation, proceeds from the offering of the Notes will be
deposited into escrow for the benefit of the holders of the
Notes.
The Notes will be senior unsecured obligations.
Upon issuance, the Notes will not be guaranteed. However, from and
after the date on which the proceeds of the offering are released
from escrow, the Notes will be guaranteed by each of Victoria’s
Secret’s existing and future wholly-owned domestic restricted
subsidiaries that (i) guarantees its senior credit facilities, (ii)
is a borrower under its ABL Facility or (iii) guarantees or incurs
any other material debt.
The loans under the Term Loan Facility will be
senior secured obligations of Victoria’s Secret guaranteed by all
of Victoria’s Secret’s existing and future material wholly-owned
domestic restricted subsidiaries, subject to customary exceptions
to be set forth in the documentation for the Term Loan
Facility.
The Notes are not being registered under the
Securities Act of 1933 (the “Securities Act”) or
the securities laws of any state and may not be offered or sold in
the United States absent registration or an applicable exemption
from the registration requirements under the Securities Act and
applicable state securities laws. The Notes may be resold by the
initial purchasers pursuant to Rule 144A and Regulation S under the
Securities Act.
This press release is neither an offer to sell nor
a solicitation of an offer to buy the Notes or any other securities
or any loans or commitments in respect of the Term Loan Facility
and shall not constitute an offer to sell or a solicitation of an
offer to buy, or a sale of, the Notes or any other securities or
any loans or commitments in respect of the Term Loan Facility in
any jurisdiction in which such offer, solicitation or sale is
unlawful. The offering in respect of the Notes is made only by, and
pursuant to, the terms set forth in the related offering
memorandum. The offering in respect of the Notes is not being made
to persons in any jurisdiction in which the making or acceptance
thereof would not be in compliance with the securities, blue sky or
other laws of such jurisdiction.
ABOUT L BRANDS: L Brands, through
its Bath & Body Works, Victoria’s Secret and PINK brands, is an
international company. L Brands operates 2,681 company-operated
specialty stores in the United States, Canada and Greater China, in
more than 700 franchised locations worldwide and through its
websites worldwide.
ABOUT VICTORIA’S SECRET & CO:
Victoria’s Secret is the world’s largest specialty
retailer offering a wide assortment of modern,
fashion-inspired collections including signature bras, panties,
lingerie, casual sleepwear and athleisure, as well as award-winning
prestige fragrances and body care. With nearly 1,400 retail
stores worldwide and a predominately female workforce of more than
25,000, Victoria’s Secret boasts the largest team of specialty
trained bra fit experts worldwide. Victoria’s Secret is committed
to inspiring women around the world with products and experiences
that uplift and champion them and their journey while creating
lifelong relationships and advocating for positive
change.
Safe Harbor Statement Under the Private
Securities Litigation Reform Act of 1995 We caution that
any forward-looking statements (as such term is defined in the
Private Securities Litigation Reform Act of 1995) contained in this
press release or made by our Company or our management involve
risks and uncertainties and are subject to change based on various
factors, many of which are beyond our control. Accordingly, our
future performance and financial results may differ materially from
those expressed or implied in any such forward-looking statements.
Words such as “estimate,” “project,” “plan,” “believe,” “expect,”
“anticipate,” “intend,” “planned,” “potential” and any similar
expressions may identify forward-looking statements. Risks
associated with the following factors, among others, in some cases
have affected and in the future could affect our financial
performance and actual results and could cause actual results to
differ materially from those expressed or implied in any
forward-looking statements included in this press release or
otherwise made by our Company or our management:
- the spin-off may not be consummated within the anticipated time
period or at all;
- disruption to our business in connection with the proposed
spin-off and that we could lose revenue as a result of such
disruption;
- the spin-off may not be tax-free for U.S. federal income tax
purposes;
- a loss of synergies from separating the businesses that could
negatively impact the balance sheet, profit margins or earnings of
both businesses or that the companies resulting from the spin-off
do not realize all of the expected benefits of the spin-off;
- the combined value of the common stock of the two
publicly-traded companies will not be equal to or greater than the
value of our common stock had the spin-off not occurred;
- Victoria’s Secret has no history of operating as an independent
company, and its historical combined and unaudited pro forma
financial information is not necessarily representative of the
results that it would have achieved as an independent, publicly
traded company and may not be a reliable indicator of our future
results;
- general economic conditions, consumer confidence, consumer
spending patterns and market disruptions including pandemics or
significant health hazards, severe weather conditions, natural
disasters, terrorist activities, financial crises, political crises
or other major events, or the prospect of these events;
- the novel coronavirus (COVID-19) global pandemic has had and is
expected to continue to have an adverse effect on our business and
results of operations;
- the seasonality of our business;
- divestitures or other dispositions, including a spin-off of
Victoria’s Secret and related operations and contingent liabilities
from businesses that we have divested;
- difficulties arising from turnover in company leadership or
other key positions;
- our ability to attract, develop and retain qualified associates
and manage labor-related costs;
- the dependence on mall traffic and the availability of suitable
store locations on appropriate terms;
- our ability to grow through new store openings and existing
store remodels and expansions;
- our ability to successfully operate and expand internationally
and related risks;
- our independent franchise, license and wholesale partners;
- our direct channel businesses;
- our ability to protect our reputation and our brand
images;
- our ability to attract customers with marketing, advertising
and promotional programs;
- our ability to maintain, enforce and protect our trade names,
trademarks and patents;
- the highly competitive nature of the retail industry and the
segments in which we operate;
- consumer acceptance of our products and our ability to manage
the life cycle of our brands, keep up with fashion trends, develop
new merchandise and launch new product lines successfully;
- our ability to source, distribute and sell goods and materials
on a global basis, including risks related to:
- political instability, environmental hazards or natural
disasters;
- significant health hazards or pandemics, which could result in
closed factories, reduced workforces, scarcity of raw materials,
and scrutiny or embargoing of goods produced in infected
areas;
- duties, taxes and other charges;
- legal and regulatory matters;
- volatility in currency exchange rates;
- local business practices and political issues;
- potential delays or disruptions in shipping and transportation
and related pricing impacts;
- disruption due to labor disputes; and
- changing expectations regarding product safety due to new
legislation;
- our geographic concentration of vendor and distribution
facilities in central Ohio;
- fluctuations in foreign currency exchange rates;
- the ability of our vendors to deliver products in a timely
manner, meet quality standards and comply with applicable laws and
regulations;
- fluctuations in product input costs;
- our ability to adequately protect our assets from loss and
theft;
- fluctuations in energy costs;
- increases in the costs of mailing, paper, printing or other
order fulfillment logistics;
- claims arising from our self-insurance;
- our and our third-party service providers' ability to implement
and maintain information technology systems and to protect
associated data;
- our ability to maintain the security of customer, associate,
third-party and company information;
- stock price volatility;
- our ability to pay dividends and related effects;
- shareholder activism matters;
- our ability to maintain our credit rating;
- our ability to service or refinance our debt and maintain
compliance with our restrictive covenants;
- our ability to comply with laws, regulations and technology
platform rules or other obligations related to data privacy and
security;
- our ability to comply with regulatory requirements;
- legal and compliance matters; and
- tax, trade and other regulatory matters.
We are not under any obligation and do not intend
to make publicly available any update or other revisions to any of
the forward-looking statements contained in this press release to
reflect circumstances existing after the date of this press release
or to reflect the occurrence of future events even if experience or
future events make it clear that any expected results expressed or
implied by those forward-looking statements will not be
realized.
For further information, please contact:
L Brands:Investor RelationsAmie Preston(614)
415-6704apreston@lb.com |
|
Media Relations Brooke Wilson (614) 415-6042
communications@lb.com |
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