Home / Knowledge / News / Apparel/Garments / Hanesbrands amends credit agreement, sets debt-reduction goal
Hanesbrands amends credit agreement, sets debt-reduction goal
Mar '09
Chairman and CEO Richard A. Noll
Chairman and CEO Richard A. Noll
Hanesbrands Inc. announced that it has successfully amended its first-lien credit agreement with debt holders and set a goal to reduce its long-term debt in 2009 by at least $300 million.

“We had a very positive response to our credit amendment, approved by an overwhelming majority of debt holders,”Chairman and Chief Executive Officer Richard A. Noll said. “Resolving this issue puts us in good position to navigate this uncertain economic environment.”

The company announced at its investor-day presentation on Feb. 24, 2009, that it had started the first-lien amendment process as a precaution to ensure that it had adequate debt-covenant cushion in the recessionary environment. The company's successful credit amendment, which delays the most restrictive debt-leverage ratio from fourth quarter 2009 to third quarter 2011, applies to the company's $990 million of Term Loans A and B as well as its revolving credit facility.

“This amendment and our ability to aggressively manage costs give us additional cushion to meet our adjusted debt-to-EBITDA ratios under a wide range of economic conditions,” said Hanesbrands Executive Vice President and Chief Financial Officer E. Lee Wyatt. “Even under the scenarios we laid out at our recent investor-day presentation, we would end 2009 with at least as much debt cushion as we had at the end of 2008.”

The amendment increases the company's interest-rate spread by 300 basis points, and LIBOR will remain a floating rate with no floor. With this new interest-rate structure, Hanesbrands expects net interest expense for 2009 to be approximately $165 million, compared with $155 million in 2008.

Under the amendment, the adjusted debt-to-EBITDA leverage ratio limits increase from 3.75 times to 4.25 times in the first quarter of 2009, from 3.5 times to 4.2 times in the second quarter, from 3.25 times to 3.95 times in the third quarter, and from 3.0 times to 3.6 times in the fourth quarter. After 2009, the new ratio continues to step down from 3.6 times, ending at 3.0 times in the third quarter 2011.

Additionally, the company has set a goal for 2009 to pay down at least $300 million of debt. The goal to accelerate debt reduction this year is supported by a number of factors the company outlined during the investor-day presentation, including cost reductions, product price increases, second-half commodity-cost benefits, reduced capital-expenditure needs and plans to reduce inventory.

“Using cash flow and conservative cost and inventory management, achieving this debt-reduction goal would bring our total long-term debt to less than $1.9 billion, a decrease of more than $700 million since our spinoff in September 2006,” Noll said.

Hanesbrands Inc

Must ReadView All

Courtesy: Reliance Industries

Textiles | On 24th Apr 2017

Reliance’s FY17 revenue from petrochemicals up 12.2%

Increase in prices across polymers and polyester chain has...

Textiles | On 24th Apr 2017

India, Kazakhstan to increase cooperation in textiles

Indian and Kazakhstan are deliberating upon increasing cooperation in ...

Textiles | On 24th Apr 2017

GST reflects 'One nation, One aspiration' spirit: Modi

Prime Minister Narendra Modi has said that the Goods and Services Tax ...

Interviews View All

Kamlesh Vaghela
RK Textiles

Very few machinery manufacturers have R&D units

Janak Dhamanwala & Sunil Dhamanwala

Moving towards sustainability is also a social change

Angelina Francesca Cheang

'Consumers in the age-group 21 to 38 are driving the activewear trend'

Kevin Nelson

Kevin Nelson, Chief Scientific Officer, TissueGen discusses the growing...

Steve Cole
Xerium Technologies

Steve Cole of Xerium Technologies discusses the industry. Xerium is the...

Urs Stalder
Sanitized AG

Urs Stalder, CEO, Sanitized AG, talks about the increasing use of hygiene...

Rupa Sood and Sharan Apparao

Nayaab, an exhibition meant to celebrate Indian weaves, is in its second...

Silvia Venturini Fendi
Fendi s.r.l

"Yes, my confidence and positive attitude are my strengths and should be...

Ritu Kumar
Label Ritu Kumar

‘Classics will return’ "There are a lot of people wearing western clothes ...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


Letter To Editor

(Max. 8000 char.)

Search Companies

April 2017

April 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.


Browse Our Archives


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search