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Valentino to Sell €450M in Bonds to Refinance Bank Debt
Maison Valentino has approved a €450 million senior secured bond sale to repay bank debt and fund investment and working capital, with shareholders Kering and Mayhoola backing the issue with a potential €250 million equity injection.
The bond sale, approved by Valentino's board in late June, is expected to be issued by August, according to a corporate filing. The senior secured notes will not be listed on a regulated market nor rated, and will carry an interest rate of Euribor 6-month plus a 3% margin.
The amortising bonds will see partial repayments begin two years after issuance. Proceeds will be used to repay the fashion house's existing bank debt early and to meet investment and working capital requirements.
Shareholders Kering and Mayhoola have committed to inject up to €250 million of equity if Valentino struggles to meet debt payments or comply with covenants. This follows a capital injection and debt refinancing agreement with lender banks last year.
The move mirrors a similar private bond sale by Prada SpA earlier this year, which raised €300 million through 10-year bonds. Valentino's offering is a step forward in strengthening its capital structure.