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Staples gets new $1 billion facility priced at Libor plus 79.5-140 bps
By Marisa Wong
Madison, Wis., June 4 - Staples, Inc. entered into a new credit agreement that provides for a maximum borrowing of $1 billion with Bank of America, NA as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.
The new credit agreement replaces the credit agreement dated Nov. 4, 2010, which provided for a maximum borrowing of $1 billion and was set to expire in November 2014.
As of May 31, the closing date of the new agreement, no borrowings were outstanding under the prior agreement.
The borrowing limit on the new facility may be increased to $1.5 billion through an accordion feature.
Borrowings made may be in the form of syndicated loans, swingline loans, multicurrency loans or letters of credit. Amounts may be borrowed, repaid and reborrowed from time to time until May 31, 2018.
Interest is equal to Libor plus a margin of 79.5 basis points to 140 bps based on Staples' credit rating and fixed-charge coverage ratio.
The letter-of-credit fee ranges from 39.75 bps to 140 bps, and the facility fee ranges from 8 bps to 22.5 bps. Both fees are also based on the company's credit rating and fixed charge coverage ratio.
The credit agreement also contains financial covenants requiring Staples to maintain a minimum fixed-charge coverage ratio of 1.5 to 1 and a maximum adjusted funded debt to total capitalization ratio of 0.75 to 1.
Merrill Lynch, Pierce, Fenner & Smith Inc., Barclays Bank plc and HSBC Securities (USA) Inc. acted as joint lead arrangers and joint bookrunners for the new credit agreement; Barclays Bank plc and HSBC Bank USA, NA acted as co-syndication agents; and Wells Fargo, NA and JPMorgan Chase Bank, NA acted as co-documentation agents.
Staples is an office supply chain store is based in Framingham, Mass.
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