New Look Group Ltd., the closely held U.K. discount-fashion retailer, hired HSBC Holdings Plc and Royal Bank of Scotland Group Plc to coordinate plans to extend its debt maturity, according to two people with knowledge of the matter.
The company may seek lender approval to extend the maturity of its term loan B and term loan C by about 15 to 18 months and the second-lien loans by three months to April 2015, said the people, who declined to be identified because the talks are private.
New Look may offer to increase the interest margin on B and C tranches to about 475 basis points, said the people. The company is also considering extending the maturity of its revolving credit, the people said. A basis point is 0.01 percentage point.
The company doesn’t plan to change the covenants of its debt, the people said.
New Look may also offer to prepay 75 million pounds of cash-pay debt at par, and an additional 25 million pounds would be earmarked to buy back payment-in-kind debt at a discount if the London-based retailer reduces borrowings to two times earnings before interest, tax, depreciation and amortization from 2.6 times currently, the people said.
An offial in London for New Look, who wouldn’t be indentified, declined to comment.
New Look said on Jan. 12 that sales for the five weeks to Dec. 31 were up 3.6 percent.