Victoria’s Secret Reportedly Borrowed a Lot of Money to Finance its Bath & Bath Works Split

According to a Bloomberg News report on Monday, lingerie retailer Victoria’s Secret has borrowed $500 million to finance its split from Bath & Body Works.

JPMorgan Chase is overseeing the sale, with investor orders due by June 30, the report said.

The Bloomberg report, citing unnamed sources, also notes that the loan is due in the year 2028 and that the company could pay interest that’s 300 to 325 basis points above Libor.

Parent company of Victoria’s Secret, L Brands, not long ago announced the spin-off that would separate the two brands into independent, publicly traded companies by August.

It was also last month that L Brands reported quarterly numbers that beat analyst expectations. The company reported first-quarter earnings and sales that topped analysts’ estimates.

L. Brands had said at the time that its results were driven by more customers paying full price for products and strong momentum across its different divisions.

For the quarter ended May 1, the company reported earnings per share of $1.25 adjusted, compared to $1.21 expected, per Refinitiv. Revenue at $3.02 billion was also ahead of the $3.01 billion expected, per Refinitiv.

Net income rose to $276.6 million, or 97 cents per share, compared with a loss of $296.9 million, or $1.07 per share, a year earlier.

The company said same-store sales at Victoria’s Secret rose 25%, compared with a 15% drop a year earlier. Same-store sales at Bath & Body Works climbed 16%, compared with a 41% jump a year earlier.

L. Brands also named the incoming chief financial officers of the two new businesses. Wendy Arlin, currently senior vice president of finance and controller for L Brands, will become Bath & Body Works CFO. Former Big Lots CFO Tim Johnson will become Victoria’s Secret CFO.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.