RH Boosts Adjusted FY17 EPS Forecast by $0.05 After Retiring $100 Mln Term Loan Ahead of Schedule

Specialty retailer RH (RH) late Tuesday said it expects to increase its non-GAAP FY17 earnings by $0.05 per share after it today repaid a $100 million second lien term loan using borrowings from its asset-backed credit facility.

The company expects to save considerably on interest costs as a result of the swapping one debt for another: the asset-backed facility bears interest at 2.75% per share compared with the current 9.5% rate for the term loan.

CEO Gary Friedman said the term loan was intended as a short-term bridge to fund a massive stock repurchase program, adding the company repaid that facility in full just three months after securing the loan.

The recent stock buyback reduced the number of outstanding RH shares by nearly half, the company said.

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