Avon closes $1.5B note offering, will repay debt

Avon Products closes on $1.5 billion notes offering; plans to repay $1.9 billion of debt

Associated Press

NEW YORK (AP) -- Avon has completed a public offering of $1.5 billion senior unsecured notes and entered into a $1 billion four-year unsecured revolving credit facility.

The refinancing activities have improved the company's balance sheet and increased its financial flexibility, said Kimberly Ross, who is executive vice president and chief financial officer. Ross said the refinancing is "critical to our ability to successfully execute Avon's turnaround."

Its stock gained 20 cents to $20.38 in midday trading.

Avon Products Inc. has embarked on a turnaround plan after suffering through declining sales, a bribery investigation and other problems. It hired new CEO Sheri McCoy last April and has begun to slash costs, hoping to save $400 million in three years, cut its dividend, laid off workers and exited some less profitable markets like Vietnam and South Korea.

The beauty products company had issued the notes earlier this month and at that time said that it would use proceeds to refinance debt and for general corporate purposes.

On Thursday Avon said that the net proceeds from the notes totaled $1.48 billion, after transaction costs. The New York company said that it plans to repay $1.9 billion of debt.

Avon said that the $1 billion revolving credit facility replaces a previous $1 billion revolving credit facility.

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