Television Shopping Channel QVC Floats $1 Billion Debt Exchange

(Bloomberg) -- Television shopping channel QVC Inc. launched exchange offers for its notes due 2027 and 2028 to push out maturities and take advantage of the debt trading at lower levels.

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The exchange is targeting QVC’s 4.75% senior secured notes due 2027 and its 4.375% notes due 2028, according to a statement from the company. Altogether, these notes have about $1 billion in principal outstanding.

Both notes have been trading below par, with the 2027 bonds trading at 91 cents on the dollar and the 2028 obligations changing hands at 81 cents, according to pricing source Trace. They’re higher by several cents on the dollar on Wednesday, after the debt exchange was announced.

Exchange offers have become a popular way for heavily indebted companies to manage their liabilities before a restructuring or costly refinancing. QVC’s endeavor is intended to improve the company’s credit profile by “reducing debt balances” and extending its maturities, according to the statement. A minimum amount of $300 million in new notes have to be issued in the exchange offers.

Holders of the 2028 notes will receive $1,000 in principal of 6.875% notes due 2029. Those who own the 2027 notes will receive $350 in the new notes and $650 in cash for every $1,000 in principal they choose to exchange. The participation deadline is September 20 at 5 p.m. New York time. Moody’s Ratings gave the new notes a B2 rating, which is five steps into junk territory.

QVC is owned by Qurate Retail Inc., which owns brands including QVC and HSN, formerly known as Home Shopping Network. Qurate has more than $8 billion in obligations and a market capitalization of just $223.5 million, according to data compiled by Bloomberg.

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