Pier 1 to Retire $69.5 Million in Notes
July 31, 2009Pier 1 Imports Inc. (PIR), Fort Worth, Texas, announced on Thursday that it has negotiated purchases and exchange agreements under which it will retire $69.5 million in aggregate principal of the Company's outstanding 6.375 percent convertible senior notes due 2036.
Under the exchange agreements for $64.5 million of these existing notes, holders received $61 million in aggregate principal of new 9 percent convertible senior otes due 2036. As part of the transaction, the company also purchased $5 million of existing notes for cash. Following these transactions, approximately $16.6 million in principal amount of the existing notes remain outstanding.
The new notes are convertible, at the option of the holder at any time on or prior to maturity or certain earlier events, into shares of the company's common stock at an initial conversion rate of 399.2016 common shares per $1,000 principal amount, representing a conversion price of $2.5050 per share.
Earlier this year, a foreign subsidiary of the Company purchased $79 million of the Pier 1's existing notes. In total, the Company has retired $148.4 million of the existing notes since the start of the fiscal year, for a weighted average price of 63 cents on the dollar.
In conjunction with the issuance of the new notes, Pier 1 also entered into an amendment of its $325 million secured credit facility under which it reduced the total commitment from $325 million to $300 million.
"We are very pleased with what we have been able to accomplish with our convertible notes," said Pier 1 President and CEO Alex Smith. "Restructuring and reducing our convertible debt has allowed us to protect our liquidity position as we continue to work our way through this economic recession. We are entering the important fall and holiday selling seasons confident in our merchandise assortments and our stores. Now that we have addressed the convertible notes, we are able to focus our attention on the day-to-day execution of our business priorities."
