Shares of RH (RH), fomerly known as Restoration Hardware, pared gains in morning trading Thursday, after the home furnishings retailer said it plans to explore a potential $300 million convertible note offering, to qualified institutional buyers and due 2024. The stock resumed trading to be up 1.2%, after being up 3.2% prior to a trading halt on news. The company said it plans to use proceeds from a potential offering primarily to retire $200 million of second lien debt, reduce outstanding borrowings from its credit facility and pay net costs of the convertible note hedge. The company said retirement of the second-lien debt would lower interest expenses by $6.5 million in the second half of fiscal 2019, and $18 million on an annual basis, which would allow the company to raise 2019 adjusted EPS by about 20 cents to 25 cents and by 65 cents to 70 cents in fiscal 2020. The stock has rallied 41.1% year to date, while the S&P 500 has gained 20.1%.
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