Staples sets talk in $5.75 billion credit facility backing Office Depot acquisition

By Paul A. Harris

Portland, Ore., April 7 – Staples Inc. set price talk for its $5.75 billion credit facility, according to a market source.

A $2.75 billion six-year senior secured term loan B is talked at Libor plus 350 basis points with a 0.75% Libor floor at 99, with 101 soft call for six months.

There is a ticking fee of 50% of the term loan margin beginning May 1, 2015 and of 100% of the term loan margin plus the Libor floor starting June 1, 2015.

There is also a 5% annual amortization.

Commitments are due April 21.

Barclays, Bank of America Merrill Lynch, Wells Fargo Securities LLC and HSBC Securities (USA) Inc. are the bookrunners on the deal.

The facility also features a $3 billion asset-based five-year revolver.

Proceeds will be used to help fund the acquisition of Office Depot Inc. and to refinance some of the debt of both companies.

Staples is a Framingham, Mass.-based retailer of office supplies. Office Depot is a Boca Raton, Fla.-based provider of products, services and solutions for the workplace.

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