Staples’ $1.6 billion bridge commitments due Friday; notes expected to launch Aug. 14 week

By Paul A. Harris

Portland, Ore., July 26 – Commitments to the Staples Inc. $1.6 billion unsecured bridge loan are due on Friday, according to a buyside source, who added that the bridge is capped at 10¼%.

A bond deal to take out the bridge is expected to launch during the Aug. 14 week.

Bank of America Merrill Lynch, UBS Investment Bank, Wells Fargo Securities LLC, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Fifth Third Bank, Jefferies LLC, RBC Capital Markets, Citigroup Global Markets Inc., Goldman Sachs Bank USA, KKR Capital Markets and Natixis are the leads on the bridge loan, with Bank of America the left lead.

Proceeds will be used to back the buyout of the company by Sycamore Partners for $10.25 in cash per share of common stock. The transaction is valued at about $6.9 billion.

Along with the bridge loan, the company has received a commitment for $3.6 billion of credit facilities to help fund the buyout.

With the acquisition, there will be an internal reorganization under which the U.S. Retail, Canadian Retail and North American Delivery businesses will be separated into stand-alone entities.

The debt financing is for the North American Delivery business, which will have pro forma leverage of around 4 times.

Closing is expected no later than December, subject to customary conditions, including the receipt of regulatory and stockholder approval. The transaction is not subject to a financing condition.

Staples is a Framingham, Mass.-based retailer of office supplies.

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