Matalan issues bonds to refinance £492m debt

MATALAN, the discount fashion and homewares retailer has completed a near £500m debt refinancing.

The Skelmersdale-based company, which has more than 220 out of town stores nationwide has sealed a £492m deal with a banking syndicate comprising of Lloyds, Morgan Stanley and Barclays.  

It has issuied two new bonds worth £342m and £150m, due for repayment in 2019 and 2020 respectively.  

Lloyds Bank Commercial Banking acted as joint mandated lead arranger on the bond offering and also increased the size of Matalan’s revolving credit facility from £30m to £50m as part of the refinancing.

Matalan, founded by former Liverpool market trader John Hargreaves, posted revenues or £1.12bn and EBITDA of £95.4m in the 53 weeks to 1st March.

Chief financial officer Stephen Hill said: “This refinancing strengthens our financial position, providing us with a longer-term and more flexible capital structure that underpins the growth plans we have for the business.”   

Lloyds Bank’s funding was provided by the bank’s mid markets, acquisition finance and debt capital markets teams.  

Paul Foster, head of Lloyds Bank’s mid cap team in Manchester, said: “We have a long and productive relationship with Matalan having acted upon both of the company’s previous bond issues.

“This refinancing lowers Matalan’s cost of borrowing and consolidates their medium to long term funding structures.  The business is well positioned to exploit the opportunities presented by the economic revival and upswing in consumer confidence.”         

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