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Big Lots to replace $600 million facility with $900 million revolver
By Marisa Wong
Los Angeles, July 29 – Big Lots, Inc., Big Lots Stores, LLC and some other direct and indirect wholly owned subsidiaries entered into a consent letter on July 27 relating to their $600 million five-year unsecured credit facility with PNC Bank, NA as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.
Under the consent letter, the administrative agent and the banks have consented to the suspension of the testing of the fixed-charge coverage ratio under the credit agreement for the quarterly period ending July 30.
The company has also agreed to either amend the credit agreement or enter into a new credit facility to replace the credit agreement no later than Oct. 28.
In connection with the consent letter, Big Lots also entered into an engagement letter on July 29 with PNC Capital Markets LLC and PNC Bank. PNC has agreed to arrange, on a best efforts basis, a five-year syndicated asset-based revolving credit facility in an amount up to $900 million, with an additional uncommitted increase option of up to $300 million.
The new credit facility will refinance and replace the existing $600 million credit facility.
The engagement letter provides, among other things, that borrowings under the new facility will be subject to a borrowing base consisting of eligible credit card receivables and eligible inventory; obligations will be guaranteed by some domestic subsidiaries and will be secured by working capital assets; interest will fluctuate based on availability under the facility, with one-, three- or six-month adjusted term SOFR as options for the benchmark; and the only financial covenant will be a springing fixed-charge coverage ratio.
The company currently expects to enter into the new facility during the fiscal quarter ending Oct. 28.
The retail chain is based in Columbus, Ohio.
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