Herbalife, the California-based weight-management, nutritional supplements and personal care products group, has announced the completion of the refinancing of its existing US$225m senior secured credit facility.
The company, formerly known as WH Holdings (Cayman Islands), said the new $300m senior secured credit facility consists of a $200m seven-year term loan and a $100m six-year revolving credit facility.
Herbalife said it used approximately $65m of available cash and $15m of borrowings under the new revolver to repay the outstanding borrowings under its existing senior credit facility and fund closing costs.
The company has also announced that it has advised the trustee of its 9 1/2% notes due 2011 of its decision to redeem the outstanding $165m aggregate principal amount of notes at the mandatory redemption price of approximately $109.8 per $100 aggregate principal amount of notes.
The company said it intends to use the proceeds from the new $200m term loan to fund the redemption and pay accrued interest. The anticipated redemption date is 23 August, 2006.
“We continue to proactively de-leverage the company reflecting the strong cash flow generation of our business coupled with the creation of a more flexible and efficient capital structure,” said Herbalife’s chief financial officer Rich Goudis. “The result has been a reduction of debt, a lower effective interest rate and improved coverage ratios which led to the recent corporate family credit rating upgrades from both Moody’s and S&P to Ba1 and BB+, respectively. The benefits from this recapitalisation will allow us to invest further in the needs of our distributors, our business and our shareholders.”