RH Announces Completion of $2 Billion Debt Financing
RH (NYSE: RH) has successfully completed a $2 billion debt financing through a Term Loan Credit Agreement, set to mature on October 20, 2028, with an interest rate tied to LIBOR. The funds will support general corporate needs and facilitate early conversions of existing convertible notes. CEO Gary Friedman highlighted the financing's role in enhancing RH's market positioning as a luxury brand. The Term Loan was rated Ba2 by Moody's and BB by S&P Global. Anticipated additional interest expense is projected at $11 million after tax for Q4 2021.
- Completion of a $2 billion debt financing, enhancing capital structure.
- Expected to improve RH's market positioning as a global luxury brand.
- Term Loan rated Ba2 (Moody's) and BB (S&P Global), indicating strong creditworthiness.
- Anticipated additional interest expense of $11 million after tax for Q4 2021.
The issuance of the Term Loan was assigned a Ba2 rating from Moody’s Investors Service and BB rating from S&P Global.
Proceeds of the Term Loan are expected to be used for general corporate purposes. In addition, a portion of the proceeds are expected to be used to pay the principal amount of RH’s outstanding convertible notes that elect early conversion. As of
Additional details regarding the Term Loan are available in the Company’s Current Report on Form 8-K filed with the
ABOUT RH
RH (NYSE: RH) is a curator of design, taste and style in the luxury lifestyle market. The Company offers collections through its retail galleries, source books, and online at RH.com, RHModern.com, RHBabyandChild.com, RHTEEN.com and Waterworks.com.
FORWARD-LOOKING STATEMENTS
This Release contains forward-looking statements within the meaning of the federal securities laws, including, without limitation, statements concerning the terms and conditions of the Term Loan Credit Agreement and Intercreditor Agreement, the potential cost of capital made available to the RH subsidiaries under such Term Loan Credit Agreement, the interest rate associated with the Term Loan, the length of time the Term Loan may remain outstanding, the potential use of proceeds of amounts borrowed under the Term Loan Credit Agreement including the repayment of the 2023 and 2024 Convertible Notes, the sources and uses of capital, our belief that we will remain opportunistic with both the sources and uses of capital, statements that the Term Loan represents an attractive instrument, our belief that the Term Loan will provide additional opportunities and flexibility in our allocation of capital that will create value for our shareholders, statements regarding the credit ratings of the issuance, the covenants and restrictions contained in the Term Loan Credit Agreement and the ability of the loan parties to maintain compliance with the terms and conditions of the Term Loan Credit Agreement and Intercreditor Agreement, from time to time. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “if,” “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “will,” “should,” “likely” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future events. We cannot assure you that future developments affecting us will be those that we have anticipated. Important risks and uncertainties that could cause actual results to differ materially from our expectations include, among others, risks and uncertainties relating to the aggregate overall level of indebtedness that we incur, the terms and conditions of any debt financing including the Term Loan Credit Agreement, risks and uncertainties concerning the use of proceeds with respect to any debt financing including the Term Loan Credit Agreement, risks and uncertainties related to our decisions regarding the allocation and uses of capital, risks and uncertainties related to fluctuations in interest rates, risks and uncertainties concerning whether the financial performance of the Company meets expectations, and those other risks and uncertainties disclosed under the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in RH’s Annual Report on Form 10-K most recently filed with the
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