From the November 2008 issue of Treasury & Risk magazine

No Time to Panic

Rick Moss is concerned but confident. As treasurer of Hanesbrands Inc., a highly leveraged 2006 spin-off from Sara Lee Corp. that needs credit from both banks and the capital markets to survive, he is exposed to the unprecedented financial crisis marked by a vicious credit freeze. But he shrugs it off. "Things have to get pretty bad before people stop wearing underwear," he says in mid-October. Moss is riding out the financial storms pretty well because Hanesbrands has a well-stocked drawer of financial underwear. He points out that it will be three years before he has to renegotiate any of Hanesbrands' bank credit facilities. Some $500 million of bonds rated Ba3/BB- don't mature until 2014. Even the cost of Hanesbrands' Libor-based borrowings isn't a big headache. "We went out over the past few months and swapped $2 billion of our $2.4 billion of debt into fixed rates when we saw an opportunity to hedge at fairly low rates. And another 250 million is in an asset securitization program, so our exposure to Libor is modest," he says.

But that doesn't mean that it's business as usual in the Hanesbrands treasury. "We've re-evaluated how we think about liquidity and how we plan our refinancings," Moss says. "We always go into planning cycles with a best-case scenario and a worst-case scenario. Now we're rethinking our worst-case scenario. We had been planning to do some optional refinancing this year, but it looks now like we'll ride out the market turbulence." He is also investigating a wider range of financing options for $4.5 billion Hanesbrands, based in Winston-Salem, N.C. "It's a lot more work," he says, "but you have to do it."

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