Dollar General details $3.5 billion credit facility, $2.1 billion bonds for LBO by KKR

By Sara Rosenberg

New York, April 11 - Dollar General Corp. revealed that its leveraged buyout financing package will include a $3.5 billion senior secured credit facility and released tranching expectations for its previously announced $2.1 billion high-yield bond offering, according to a PREM14A recently filed with the Securities and Exchange Commission.

The credit facility consists of a $2.5 billion seven-year term loan and a $1 billion six-year asset-based revolver.

Of the total revolver amount, $300 million will be available on the date of the initial borrowing.

As for the bond deal, that will be comprised of $1.45 billion of senior unsecured notes and $650 million of senior subordinated notes, the filing said.

As a backup for the bonds, the company has received a commitment for $2.1 billion of bridge loans, consisting of a $1.45 billion senior unsecured increasing rate bridge facility, which included a senior unsecured PIK option bridge facility of up to $725 million, and a $650 million senior subordinated bridge facility.

Goldman Sachs, Citigroup, Lehman Brothers and Wachovia are the joint lead arrangers and joint bookrunners on the credit facility and the bridge loans. CIT Corp. is the administrative agent for the asset-based revolver.

Under the LBO agreement, Kohlberg Kravis Roberts & Co. LP is buying Dollar General in a transaction with a total value of $7.3 billion, including about $380 million of net debt. Dollar General shareholders will receive $22.00 in cash for each share of common stock.

Other LBO financing will come from $2.775 billion in equity.

The transaction is expected to close in the third quarter, subject to the approval of Dollar General shareholders, customary closing conditions and regulatory approvals.

Dollar General is a Goodlettsville, Tenn., discount retailer.

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