B&M launches £250m senior secured notes offering

B&M has announced that it intends to raise £250m through a sterling-denominated senior secured notes offer due in 2028. 

B&M said it would use the money raised from the secured notes, a type of corporate bond that gives an investor a higher-priority claim compared to junior notes when a company files bankruptcy, for “general corporate purposes”.

It added that the notes will be senior secured obligations of the company and guaranteed by certain of its subsidiaries and that the notes will rank pari passu in right of payment with the company’s obligations in regards to its existing senior credit facilities and its existing £400m senior secured notes due 2025.

The news comes a week after B&M revealed group revenues increased by 1.2% to £2.26bn – and up 26.8% on a two-year basis – during the 26-week period ending 30 September 2021.

It said its gross margin in its UK business was “particularly strong”, driven by a change in the sales mix towards general merchandise and high sell-through across Spring/Summer seasonal ranges leading to limited markdown activity.

However, it revealed that group adjusted profit before tax decreased by 6.2% to £238m – down from £253.6m the previous year, whilst statutory profit before tax increased by 2.4% to £241.4m.

At the time Simon Arora, chief executive, said: “The group has performed strongly throughout the first half of our financial year, with customers continuing to be drawn to our value for money offer. We have responded decisively to supply chain challenges by leveraging our strong supplier relationships and we have improved in-store execution.

“As a consequence, we are fully stocked heading into the Golden Quarter, with stores already showcasing our excellent Christmas ranges. To colleagues across the Group, I express my gratitude for their dedication, skill and commitment, which have made these results possible.”