OfficeMax amends, extends terms via $650 million five-year facility

By Susanna Moon

Chicago, Oct. 14 - OfficeMax Inc. amended its loan agreement with Wells Fargo Bank, NA as administrative agent, pushing the maturity out to October 2016 and consolidating its U.S. and Canadian facilities into one $650 million North American secured revolving credit facility, according to an 8-K filing with the Securities and Exchange Commission.

Interest on the loans will be Libor plus 175 basis points to 225 bps.

The facility replaces the company's $700 million U.S. and C$60 million Canadian credit facilities, which were set to expire in July 2012. There was no outstanding debt under the facility.

As of Oct. 6, there was no debt and $52 million of standby letters of credit issued under the previous U.S. facility, and there was no debt and no letters of credit issued under the Canadian facility.

Wells Fargo Capital Finance, LLC, Bank of America Merrill Lynch and J.P. Morgan Securities LLC are the joint lead arrangers.

The $650 million credit limit may be raised or reduced by up to $200 million for a maximum of $850 million or a minimum of $450 million, both upon the company's request with agreement of lenders, the filing stated.

The total limit on swingline loans is $60 million and the total limit on letters of credit is $250 million.

The borrowing base is 90% of eligible credit card receivables and other accounts receivable, plus a percentage of the value of their respective eligible inventory, less any reserves set by lenders that reduce the amount of loans and letters of credit.

There is an unused line fee at an annual rate equal to either one-half or three-eighths of 1% of the amount by which the average daily principal balance of the total outstanding revolving loans, swingline loans and letters of credit for the quarter is less than the U.S. maximum credit.

The fee rate is half of 1% if the average daily principal balance is less than half of the U.S. maximum credit and is three-eighths of 1% if the average daily principal balance is equal to or greater than half of the U.S. maximum credit. Until Jan. 1, the fee rate is half of 1% of the average daily principal balance, regardless of the amount of the balance.

OfficeMax must maintain excess borrowing availability of the greater of at least $30 million or 7½% of the lesser of the combined maximum credit and the sum of the borrowing bases of the companies.

OfficeMax is based in Naperville, Ill. The company provides office supplies and paper, print and document services; technology products and solutions; and office furniture to large, medium and small businesses, government offices and consumers.

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