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New Look launches £800m bond issue to shift debt burden

New Look is attempting to reduce its debt burden through an £800m bond issue.

The value retailer has been plagued by £1.1bn-worth of debts, including £750m of payment-in-kind (PIK) debt, which carries a high level of interest payable when it matures.

If successful the round of fundraising New Look is now embarking on will wipe out half of this senior debt and negotiate new terms on the remaining PIKs, as well as pushing back the point at which the debt must be paid from 2015 to 2018.

Payment of New Look’s lower interest, or junior, debt totalling £350m has also been pushed back to this date.

A source close to the situation told Drapers: “It offers a five-year window for [new chief executive] Anders Kristiansen to get the business really motoring and push his Chinese strategy. They are confident from here they will be able to restructure in 2018; this just gives them the space to be able to do it.”

Goldman Sachs and JPMorgan Casenove are underwriting the issue.

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