McPherson’s has advised bondholders it will exercise its call option and redeem $15m of floating rate notes on 31 March 2017 at the 103% call price
The company continues to generate good cashflow and has reduced debt significantly over the year. At 31 December 2016, leverage (Net debt/ LTM EBITDA) reduced to 1.5x from 3.1x at 31 December 2015. Management has stated a 1.0x–1.5x target range.
No action is required from noteholders. Investors will be contacted soon with full information.
The company has previously bought back $20m of its fixed and floating bond lines. This action will bring total redemptions to $35m compared to the original total issue size of $60m.
The table below illustrates the pro forma capital structure after this redemption.
Pro forma capital structure
| | Drawn | Limit/ issue size | Maturity |
| Secured overdraft | 15.0 | 48.25 | Rolling |
| Bond floating rate BBSW +4.30% | 10.0 | 30.0 | 31 March 2019 |
| Bond fixed rate 7.10% | 15.0 | 30.0 | 31 March 2021 |
| Total debt | 40.0 | 108.25 |
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Source: FIIG Securities, company reports