Debenhams is to issue £225m-worth of bonds, up from the original £200m announced last week.
The bond issue, for seven-year notes with a yield of 5.25%, will close on July 2. They will be guaranteed by some of Debenhams’ UK subsidiaries, though these have not been named.
Debenhams said the proceeds will be used to pre-pay existing credit facilities. At the same time the deparment store business plans to extend its bank debt, in the form of a £425m revolving credit facility, to October 2018.
Debenhams chief executive Michael Sharp said: “This refinancing will allow us to reduce our reliance on traditional bank funding and fulfil our desire to diversify our sources of funding. In addition, we expect to achieve a material saving in interest costs over the life of the notes.
“The notes offering was well-subscribed and we believe the level of demand reflects the strength of investor confidence in our business and our strategy to build a leading international, multi-channel brand.”
Barclays, Lloyds Bank and The Royal Bank of Scotland are acting as joint global co-ordinators and joint bookrunners. Lazard will provide independent advice to Debenhams.