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Staples upsizes term loan to $2.9 billion, cuts bonds to $1 billion
By Sara Rosenberg
New York, Aug. 14 – Staples Inc. increased its seven-year first-lien term loan to $2.9 billion from a revised size of $2.7 billion and an initial size of $2.4 billion, and downsized its bond offering to $1 billion from a revised amount of $1.3 billion and an initial amount of $1.6 billion, according to a market source.
Also, price talk on the term loan was changed to a range of Libor plus 375 basis points to 400 bps from Libor plus 425 bps and the original issue discount was tightened to 99.75 from 99.5, the source said.
The term loan still has a 1% Libor floor and 101 soft call protection for six months.
UBS Investment Bank, Bank of America Merrill Lynch, Deutsche Bank Securities Inc., Credit Suisse Securities (USA) LLC, RBC Capital Markets LLC, Jefferies LLC, Fifth Third Bank, Goldman Sachs Bank USA, Citigroup Global Markets Inc., KKR Capital Markets and Natixis are the bookrunners on the deal.
Commitments for the term loan were scheduled to be due by the end of the day on Monday, the source added.
Proceeds will be used to help fund 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.
As part of the financing package, the company is also getting a $1.2 billion ABL facility for which Wells Fargo is the left lead.
With the acquisition, there will be an internal reorganization under which the U.S. retail, Canadian retail, and North American delivery business will be separated into stand-alone entities.
The debt financing is for the North American delivery business.
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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