Signet Completes $446M Credit Outsourcing

RAPAPORT… Signet Jewelers has completed the final phase of its credit-outsourcing
program for its non-prime receivables, for which it received $445.5 million, it
said Monday.



CarVal Investors, a global alternative-asset manager, agreed
in March to acquire approximately 70% of the retailer’s existing credit
accounts. Signet secured a contract with Castlelake, another investment firm,
for the remaining 30% in May. The two companies have committed to purchasing an
equivalent amount of any future receivables for the next five years.


The company also closed a $960 million deal with Alliance
Data Systems Corporation in October for its prime receivables.


With its credit structure fully outsourced, Signet can
enhance its strategic and operational focus on its core jewelry-retail
business, it said.


The sale also significantly limits the risk arising from
the company’s balance-sheet position. It also reduces the amount of money the company requires to maintain
its day-to-day operations. In addition, it will allow the company to return
significant capital to shareholders, it added.


Signet will use the proceeds, along with its cash on hand,
to repurchase $475 million worth of company shares throughout fiscal 2019.