Revlon Plans to Refinance Existing Credit Agreement

2006-11-29 | 08:33

Revlon, Inc. announced today that its wholly-owned operating subsidiary, Revlon Consumer Products Corporation (RCPC), plans to refinance its existing credit agreement as part of the company's overall plans to improve cash flow and strengthen its balance sheet and capital structure. As part of the refinancing, RCPC expects to refinance and replace its existing $800 million term loan with a new 5-year $840 million term loan facility and amend its existing $160 million multi-currency revolving credit facility and extend its maturity through the same 5-year period. It is expected that the 2006 Term Loan Facility would be secured by substantially the same collateral package and guarantees that secure RCPC's existing term loan facility and the 2006 Revolving Credit Facility will continue to be secured by its existing collateral package and guarantees. While there can be no assurances that the 2006 Credit Facilities will be finalized and closed, if RCPC completes this refinancing, the company believes that it will result in annual interest savings due to expected lower interest margins, provide the company with greater financial and other covenant flexibility and extend the maturity dates of RCPC's existing bank credit agreement. RCPC expects to use the proceeds of the 2006 Credit Facilities to repay in full the approximately $800 million of outstanding indebtedness (plus accrued interest and a prepayment fee) under its existing term loan facility. The balance of such proceeds is expected to be available for general corporate purposes, after paying fees and expenses incurred in connection with consummating the 2006 Credit Facilities. RCPC expects to close and fund the 2006 Credit Facilities in late December 2006. Consummation of the 2006 Credit Facilities transactions is subject to a number of customary conditions, including, among other things, the execution of definitive documentation, perfection of security interests in collateral and that Revlon launch a rights offering for at least $100 million in equity securities (although the 2006 Credit Facilities are not conditioned upon the consummation of such rights offering). Citicorp Global Markets Inc. has agreed to act as Sole Lead Arranger and Sole Bookrunner, with Citicorp USA, Inc. acting as Administrative Agent on the 2006 Term Loan Facility and 2006 Revolving Credit Facility. JPMorgan Chase Bank, N.A. has agreed to act as Syndication Agent on the 2006 Term Loan Facility.