Avon Completes Refinancing Activities

Completion of a public offering of $1.5 billion in notes was achieved by Avon Products at the same time it entered into a $1 billion four-year unsecured revolving credit facility, the company said yesterday.

The credit facility replaces a previous $1 billion agreement, while the proceeds from the offering nets Avon $1.48 billion with maturities of 3, 7, 10, and 30 years. All totaled, the consumer products company will be able to repay $1.9 billion of debt, reduce leverage, and provide financial flexibility to support its turnaround activities.

Avon's executive vice president and CFO Kimberly Ross said, "Through this refinancing, we have achieved increased financial flexibility, which is critical to our ability to successfully execute Avon's turnaround. Our refinancing activities have improved our balance sheet, and we are pleased with the outcome."

Avon expects its interest expense will rise by about 10% this year compared to 2012 as it extends its maturity profile and decreases its reliance on floating rate debt. It will also be affected by one-time charges associated with make-whole premiums related to the prepayment of private placement notes of $65 million and $25 million, should it prepay its Notes due in 2014.

Avon sells women's beauty products and had nearly $11 billion in sales in 2012.

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