Gildan Activewear (TSE:GIL.A.; NYSE:GIL) today announced that it has completed a private placement of U.S.$70 million of 7-year Notes with a group of five U.S. and Canadian financial institutions.

Concurrently, the Company has entered into a cross-currency swap agreement, as a result of which the principal amount will be $105 million and the interest rate will be 8.79 %. Principal repayments begin on the fourth anniversary of the Note issue, for a 5.5 year average life. Merrill Lynch & Co. acted as advisor and lead placement agent on the transaction.

The proceeds have been applied to repay all of the Company's $45 million existing subordinated debt, which had interest rates ranging from 11 % to 13 %, for an annual interest saving of approximately $0.07 per share after-tax. The balance of the net proceeds have been utilized to repay all of the Company's outstanding bank debt. Subsequent to this transaction, the Company will have approximately $10 million of cash on hand, and the full amount of its $100 million revolving bank credit facility will be available as required to meet the Company's financing needs to support its ongoing growth strategy. A one-time charge of $0.12 per share will be reflected in Gildan's third quarter financial statements, comprised of an $0.08 per share early prepayment penalty, and an $0.04 per share non-cash charge to write off deferred financing costs in respect of the subordinated debt.

"With this debt financing transaction and our 1999 follow-on equity issue, we believe that we have addressed our capital needs for the foreseeable future," commented H. Greg Chamandy, Chairman and Chief Executive Officer. "First and most important, we have further strengthened our balance sheet and ensured that we have the necessary financing capacity and flexibility to pursue our plans for further significant expansion.

Our philosophy is to maintain a conservative capital structure, while continuing to be aggressive in driving sales growth. Also, in line with our commitment to constantly reinforce every element of our cost leadership position, we have reduced our ongoing cost of capital."

Gildan Activewear is a vertically integrated manufacturer and marketer of premium quality branded basic activewear for sale principally in the wholesale imprinted activewear segment of the North American, European and other international apparel markets. The Company manufactures and sells premium quality 100 % cotton T-shirts, 50 % cotton/50 % polyester T-shirts, placket collar golf shirts and premium quality sweatshirts in a variety of weights, sizes, colours and styles. The Company sells its products as blanks, which are ultimately decorated with designs and logos for sale to consumers.

This press release contains statements that are forward-looking and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated.