Huntington Beach-based clothing maker Quiksilver Inc. has outlined terms for a $266 million bond offering in Europe, taking another step in the reworking of its finances.
The company is selling bonds due in 2017 that carry an 8.875% interest rate. The bonds are selling at face value.
Quiksilver plans to use the proceeds to pay off $145 million in loans in Europe as part of a move announced last month.
The bond sale and loan payment will allow the company “greater operating and financial flexibility,” it said.
The move is the latest by Quiksilver to shore up its finances after a recent near-death experience.
The company nearly was sunken by 2005’s $560 million buy of French ski maker Rossignol, which drove a string of losses at Quiksilver and left the company laden with debt.
Quiksilver ended up unloading Rossignol in a $50 million fire sale in 2008 but was left with about $1 billion in short- and long-term debt from the deal and borrowing to keep Rossignol afloat before the sale.
In 2009, Quiksilver struck a lifesaving financing deal with New York-based Rhone Group LLC that helped finance a U.S. line of credit and consolidate its European debt.
Earlier this year, Quiksilver exchanged shares for $140 million in debt held by Rhone. The move helped further bolster the company’s once crippling balance sheet.
Rhone now owns nearly a third of Quiksilver, up from 16% before the debt swap.
Quiksilver still is a paying sizable interest on its European debt offering.
The company’s debt carries a risky “junk” rating, though Standard & Poor’s Financial Services LLC recently upped its rating on the company a notch to “B,” which still falls in the junk category.
