Signet Completes $446M Credit Outsourcing

RAPAPORT... Signet Jewelers has completed the final phase of its credit-outsourcingprogram for its non-prime receivables, for which it received $445.5 million, itsaid Monday. CarVal Investors, a global alternative-asset manager, agreedin March to acquire approximately 70% of the retailer's existing creditaccounts. Signet secured a contract with Castlelake, another investment firm,for the remaining 30% in May. The two companies have committed to purchasing anequivalent amount of any future receivables for the next five years. The company also closed a $960 million deal with AllianceData Systems Corporation in October for its prime receivables. With its credit structure fully outsourced, Signet canenhance its strategic and operational focus on its core jewelry-retailbusiness, it said. The sale also significantly limits the risk arising fromthe company's balance-sheet position. It also reduces the amount of money the company requires to maintainits day-to-day operations. In addition, it will allow the company to returnsignificant 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.