Family Dollar Stores replaces revolvers with $1 billion new revolvers

By Angela McDaniels

Tacoma, Wash., Nov. 15 - Family Dollar Stores, Inc. entered into amended and restated credit agreements on Wednesday that provide for a $600 million revolving credit facility due Nov. 13, 2018 and a $300 million revolver due Nov. 13, 2017, according to an 8-K filing with the Securities and Exchange Commission.

The new revolvers replace the company's $400 million four-year revolver dated Nov. 17, 2010 and $300 million five-year revolver dated Aug. 17, 2011.

Wells Fargo Bank, NA is the administrative agent.

The company said the new revolvers improve its liquidity profile by increasing its borrowing capacity, extending its maturities and reducing the overall cost of its borrowings.

The interest rates were not disclosed in the filing.

Each revolver has two one-year extension options and a $100 million accordion feature.

The company said $18.7 million of letters of credit outstanding under the prior $300 million five-year revolver were transferred to the new $300 million revolver.

The company drew $300 million of the $600 million revolver at closing and none of the $300 million revolver.

Proceeds may be used for any general corporate purpose.

The covenants of the new credit facilities are substantially similar to those in the company's prior credit facilities, according to the filing. They include a limitation on priority debt to 10% of the company's consolidated net worth, a covenant not to permit the consolidated leverage ratio to exceed 50% and a covenant not to permit the consolidated fixed charge coverage ratio to be less than 2 to 1.

Family Dollar is based in Charlotte, N.C., and operates general merchandise retail discount stores.

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