LPC: Sports Direct launches £ 700million loan refinancing

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A man arrives for the Sports Direct AGM at their headquarters in Shirebrook, UK on September 6, 2017. REUTERS / Darren Staples

LONDON (Reuters) – UK sporting goods retailer Mike Ashley Sports Direct International SPD.L launched syndication in the amount of £ 700 million (US $ 950.67 million) plus loan refinancing, a senior credit banker said on Wednesday.

The loan, which is unsecured, is coordinated by Barclays and HSBC. A banking meeting was held at the company’s headquarters in Shirebrook on Wednesday for lenders.

The revolving credit facility will replace a £ 788 million unsecured revolving working capital facility that was due to mature in September 2018.

The deal was originally put in place in May 2014 by a group of 13 banks with Barclays as the facility agent and totaled £ 738million. It was raised to £ 758million in November 2014 with an accordion feature, and then to £ 788million in 2016. It paid a margin of between 115bp and 200bp against Libor.

In 2016, the company decided not to renew a £ 250million shareholder loan from Mike Ashley / Mash Holdings after it was criticized for using that loan.

The company used the cheaper shareholder loan to avoid paying user fees on the revolving credit, which would have been incurred if more than a third of the gun had been fired.

Sports Direct achieved considerable savings by using the shareholder loan, which paid about half of the interest margin on the gun and had no arrangement or commitment fees.

The arrangement was unusual for a state-owned company, but Sports Direct saw savings of over £ 1million.


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