Kellwood completes crucial bond swap offer
Kellwood Co., a leading apparel maker based in Town and Country, said Thursday it has completed a crucial bond exchange that had appeared to unravel earlier this month.
The deal to exchange new senior secured notes due in 2014 for existing senior notes that matured July 15 betters Kellwood’s financial standing, the company said. Objections this month by Deutsche Bank, Kellwood’s biggest bondholder, had threatened to derail the agreement between the company and the other bondholders to exchange $140 million in bonds.
The Wall Street Journal reported two weeks ago that Kellwood faced the possibility of bankruptcy if the exchange offer failed.
"I am very pleased that Deutsche Bank and the other bondholders accepted Kellwood’s exchange offer," said Michael W. Kramer, Kellwood’s president and chief executive. "The conclusion of this transaction not only creates a better deal for our bondholders, the exchange into new notes with a maturity in 2014 strengthens our financial position."
Kramer said the agreement assures Kellwood, the maker of Phat Farm, Sag Harbor and other clothing brands, "full access to our $175 million credit facility life insurance."
Kellwood was a publicly traded company until February 2008, when it was purchased for $542 million by Sun Capital Partners, a private equity fund based in Boca Raton, Fla. Kellwood employs about 2,000 people, including 175 executives and other workers in St. Louis.
Once primarily known for Sag Harbor and other moderately priced labels, Kellwood has been restructuring to cut costs and build its higher-priced clothing business.
The company raised cash in November by sellling its Gerber Childrenswear and Hanna Andersson businesses to an affiliate of Sun Capital for $179 million. Kellwood said at the time it would use about $145 million from the spinoff sale to pay down debt.