FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Special Report of Foreign Issuer
Pursuant to Rule 13a - 16 or 15d - 16 of
The Securities and Exchange Act of 1934
For the date of 16 March 2009
SIGNET JEWELERS LIMITED
(Translation of registrant's name into English)
Clarendon House,
2 Church Street,
Hamilton HM11,
Bermuda
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover
Form 20-F or Form 40F.
Form 20-F X Form 40-F
Indicate by check mark whether the registrant by furnishing the information contained in
this Form is also thereby furnishing the information to the Commission pursuant to
Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
If "Yes" is marked, indicate below the file number assigned to the registrant in connection
with Rule 12g3-2(b): 82-
Signet Jewelers Ltd (NYSE and LSE: SIG)
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Embargoed until 7.30 a.m. (EST)
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Signet Enters Into Amended Borrowing Agreements
Signet Jewelers Ltd (
"Signet"),
the world's largest specialty
retail
jeweler, today announced that it has
entered into
amended borrowing agreements.
Discussions to make amendments to, and reduce the size
of, the Group's borrowing facilities were initiated by
Signet in November 2008, in light of a significant
deterioration in the economic environment. The goal of
the discussions was to provide the Group with
additional financial flexibility in the medium term,
while more appropriately structuring the borrowing
facilities required by the significantly lower level of
net debt now expected, based on the Group's revised
operating and expansion strategies. Signet anticipates
that it will be in compliance with the terms of the
original borrowing agreement when it announces results
for the year ended January 31, 2009 on March 25, 2009.
The amendments
relate to the terms of a
$380 million
2013
to
2018
year
US Private Placement Note Term Series Purchase Agreement entered into on
March
30,
2006 (the "Note Purchase Agreement") and a $520 million unsecured multi-currency
five year revolving credit facility agreement entered into on June 26, 2008 (the
"Facility Agreement").
At January 31, 2009 the amount
drawn
under the Facility Agreement was $135.0 million.
Under the amended
agreements, Signet will prepay $100 million of the
notes at par plus accrued interest
on March 18, 2009
and
the revolving credit agreement
is
reduced in size to $370 million
with immediate effect.
In addition,
the margin paid on the revolving credit agreement and the coupon on the notes
have been increased.
The most stringent
condition
under the
original
agreements
was a fixed charge
cover
covenant. The definition of this covenant has been amended
to
include depreciation
in
the earnings,
and
exclude
service charges and rates from expenses. This covenant
is set
at 1.4:1,
using the amended definition,
until the end of fiscal 2012, equivalent
to a reduction to about 1.1:1 from 1.4:1
under the former definition of fixed charge cover.
The fixed charge cover is then set at 1.55:1 until the end of fiscal 2013.
The amended agreements
also
reduce the
permitted
ratio of
net debt to
earnings
before interest, tax, depreciation and amortization
covenant
to 2:1 from 3:1
(2.5:1 in the third quarter
of each fiscal year)
and
places restrictions on the Group's ability to
undertake certain activities, including
cash distributions to shareholders.
A more detailed description of the amendments
is
set out below.
Amendment fees and other related
costs of $9.5
million will be
charged in fiscal 2010.
Walker Boyd, Group Finance Director, commented: "
The amended borrowing agreements give Signet greater long
-
term security
in its financing
and the reduction in facility size more closely matches the future financing
requirements of the Group. The conclusion of these negotiations
reflects the
strong
working relationship that Signet has with
our lenders
and we appreciate their support
of
the Group in the current difficult economic environment."
Amended Facility Agreement
The terms of
the
amended
Facility
Agreement
(the "
Amended
Facility
Agreement"),
inter alia, include:
-
the ability by Signet to draw $370 million in the form of multi-currency
cash advances and
the issuance of letters of credit
; and
-
an increased margin of 2.25% above LIBOR (from 1.20% above LIBOR), subject
to adjustment depending on the performance of the Group, with the minimum
being increased to 1.75% above LIBOR (from 1.0% above LIBOR) and the
maximum being increased to 2.75% above
LIBOR (from 1.75% above LIBOR).
The continued availability of the Amended Facility Agreement is conditional upon
the Group achieving certain financial performance criteria,
including those
set out below:
-
the ratio of Consolidated Net Debt to Consolidated EBITDA (Earning Before
Interest, Tax, Depreciation and Amortization) shall not exceed 2:1 for each
quarter,
except the third quarter when it
shall not exceed
2.5:1;
-
Consolidated Net Worth (total net
tangible
assets) shall
not fall below $800 million;
-
the ratio of EBITDAR (Earnings Before Interest, Tax, Depreciation,
Amortization, Rents and Operating Lease Expenditure) to Consolidated Net
Interest Expenditure plus Rents and Operating Lease Expenditure excluding
Service Charges and Rates shall be equal to or greater than 1.4:1 for the
trailing 12 months at each quarter end to January 2012,
increasing
to 1.55:1 until January 2013 and then to 1.85:1 for subsequent
periods.
The ratio of 1.85:1
is
equivalent to 1.4:1
under
the original Facility Agreement;
-
beginning with
fiscal 2011,
the facility will be reduced, on a pro rata basis with the
notes outstanding (see below), by at least 60% of any reduction in net debt
from the prior year end; and
-
no "Shareholder
Returns"
(defined as
including dividends, share buybacks or other similar payments) during
fiscal 20
10 or
fiscal 2011, and thereafter such returns may only be made if the
amended
fixed charge cover is above 1.7:1, there are no subsisting defaults and the
directors confirm that they expect Signet to continue to comply with the
covenant in the following 12 months.
The Amended Facility
Agreement
retains
certain provisions which are customary for this type of agreement, including
standard "negative pledge" and "pari passu" clauses.
Amended Note Purchase Agreement
Coincidental to entering into the Amended Facility
Agreement,
amendments were made to the Note Purchase Agreement.
The original Note Purchase Agreement took the form of fixed rate investor
certificate notes ("Notes"). These Notes represent 7, 10 or 12 year maturities,
with Series (A) $100 million 5.95% due 2013; Series (B) $150 million 6.11% due 2016
and Series (C) $130 million 6.26% due 2018. The
financial covenants
of the
original
Note Purchase Agreement were
substantially the same as in
the original Facility Agreement.
The terms of
the
amended
Note Purchase Agreement ("
Amended
Note Purch
ase Agreement"), where they are
different to those in the Amended Facilities Agreement
disclosed above,
are, inter alia:
-
the
coupo
n was increased by an additional 2.0% (subject to a further 1.0% increase
until fiscal 2013 if the
amended
fixed charge coverage ratio is less than
1.6:1,
and an additional 1.0% increase if
Note
holders are subject to increased capital charges
as a result of a requirement to post additional reserves under applicable
insurance regulations, as determined by the insurance regulator
)
;
-
to prepay $100 million at par plus accrued interest on March 18, 2009.
Subsequent prepayment offers, at par, are to be made in February of each of
the following years - 2010, 2011, 2012 and 2013. The minimum amount of each
such offer being the Note
holders' pro
rata share of 60% of any reduction in net debt that occurred over the
preceding fiscal year. Any proportion of the
2011,
2012 or 2013 offers
rejected by Note
holders may be applied to Shareholder Returns,
as defined in the Amended Facility
Agreement; and
-
subsequent to January 2013, Shareholder R
eturns may only be made if total
offers
to prepay
of
$190 million of the Notes
have been made,
and that an additional prepayment offer at a 2% premium to par has
also
been made, in which case the Shareholder Returns may be no greater than the
proportion of the additional offer rejected by the Note holders.
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Walker Boyd, Group Finance Director
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Tim Jackson, Investor Relations Director
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Signet operated 1,959 specialty retail jewelry stores at January 31, 2009; these
included 1,401 stores in the US, where the Group trades as "Kay Jewelers", "Jared
The Galleria Of Jewelry" and under a number of regional names. At the same date
Signet also operated 558 stores in the
UK
, where the Group trades as "H.Samuel", "Ernest Jones" and "Leslie Davis".
Further information on Signet is available at www.signetjewelers.com.
See also
www.kay.com
, www.jared.com, www.hsamuel.co.uk and www.ernestjones.co.uk
.
INVESTOR RELATIONS PROGRAM DETAILS
Full Year Results, Wednesday, March 25, 2009
The Full Year Results for the 52 weeks ended January 31, 2009 are expected to be
announced at 7.30 a.m. EST on Wednesday, March 25, 2009. On that day there will be
a conference call chaired by Terry Burman at 9.00 a.m. EST (1.00 p.m. GMT and 6.00
a.m. Pacific Time) and a simultaneous audio webcast with slide
presentation available at www.signetjewelers.com. The dial-in details for the
conference call are:
Citi
Retail Reverse Roadshow, to be held in
London
on Friday, March
27,
2009
Signet will be taking part in the Citi Retail Reverse Roadshow to be held in
London
on Friday, March 27
, 2009
. Present will be Walker Boyd, Group Finance Director and Tim Jackson, Investor
Relations Director.
Morgan Stanley Retail Field Trip,
Wednesday, April
1
, 2009
Signet will be taking part in the Morgan Stanley Retail Field Trip on
Wednesday, April
1, 2009 in
Phoenix,
Arizona. Present will be Walker Boyd, Group Finance Director
and Mark Light, Chief Executive Officer of the US Division.
This release includes statements which are forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. These statements,
based upon management's beliefs as well as on assumptions made by and data
currently available to management, appear in a number of places throughout this
release and include statements regarding, among other things, our results of
operation, financial condition, liquidity, prospects, growth, strategies and the
industry in which the Group operates. Our use of the words "expects," "intends,"
"anticipates," "estimates," "may," "forecast," "objective," "plan" or "target," and
other similar expressions are intended to identify forward-looking statements.
These forward-looking statements are not guarantees of future performance and are
subject to a number of risks and uncertainties, including but not limited to
general economic conditions, the merchandising, pricing and inventory policies
followed by the Group, the reputation of the Group, the level of competition in the
jewelry sector, the price and availability of diamonds, gold and other precious
metals, seasonality of the Group's business and financial market risk.
For a discussion of these and other risks and uncertainties which could cause
actual results to differ materially, see the "Risk and Other Factors" section of
the Annual Report & Accounts of Signet Group plc furnished as an exhibit to its
Report on Form 6-K furnished with the U.S. Securities and Exchange Commission on
May 1, 2008 and other filings made by the Company with the Commission. Actual
results may differ materially from those anticipated in such forward-looking
statements even if experience or future changes make it clear that any projected
results expressed or implied therein may not be realized. The Company undertakes no
obligation to update or revise any forward-looking statements to reflect subsequent
events or circumstances.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
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SIGNET JEWELERS LIMITED
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By: /s/ Walker Boyd
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Name: Walker Boyd
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Title: Group Finance Director
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Date: 16 March 2009