Conn’s (CONN) Unit Issues $104M of Asset-Backed Notes
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Conn’s, Inc. (Nasdaq: CONN), announced that a subsidiary issued $103.7 million of BBBsf-rated, fixed-rate notes to provide additional liquidity and support for the Company's growth plans.
The notes bear interest at 4.0% and were sold at a discount to deliver a 5.21% yield, before considering transaction costs. The Company estimates that, as a result of the transaction, its interest expense will increase approximately $2.2 million during fiscal year 2013. The Company is not revising its previous diluted earnings per share guidance of $1.20 to $1.30 for fiscal 2013 for this transaction. The principal balance of the notes, which are secured by certain customer receivables, will be reduced on a monthly basis by collections on the underlying customer receivables. While the final maturity for the notes is April 2016, the Company currently expects to repay any remaining outstanding note balance in April 2013 using cash flows from operations, borrowings under existing credit facilities or other capital transactions. Jefferies & Company, Inc. served as sole bookrunner and initial purchaser for the transaction.
The notes bear interest at 4.0% and were sold at a discount to deliver a 5.21% yield, before considering transaction costs. The Company estimates that, as a result of the transaction, its interest expense will increase approximately $2.2 million during fiscal year 2013. The Company is not revising its previous diluted earnings per share guidance of $1.20 to $1.30 for fiscal 2013 for this transaction. The principal balance of the notes, which are secured by certain customer receivables, will be reduced on a monthly basis by collections on the underlying customer receivables. While the final maturity for the notes is April 2016, the Company currently expects to repay any remaining outstanding note balance in April 2013 using cash flows from operations, borrowings under existing credit facilities or other capital transactions. Jefferies & Company, Inc. served as sole bookrunner and initial purchaser for the transaction.
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