Staples readies launch of $3.2 billion term loan for Tuesday

By Sara Rosenberg

New York, March 22 – Staples Inc. is set to hold a bank meeting at 10 a.m. ET in New York on Tuesday to launch a $3.2 billion term loan, according to a market source.

The company also plans on getting $750 million of other secured debt and $1,375,000,000 of unsecured debt.

UBS Investment Bank, Goldman Sachs Bank USA, Bank of America Merrill Lynch, Barclays, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Jeffries LLC, KKR Capital Markets, Morgan Stanley Senior Funding Inc. and RBC Capital Markets are the arrangers on the deal, with UBS the left lead and administrative agent on the term loan. Goldman Sachs is the lead left on the other secured debt and unsecured debt.

Proceeds will be used to refinance existing debt, including $1 billion of unsecured bonds that are expected to be taken out at the make-whole provision under the existing indenture.

Pro forma adjusted net secured leverage will be 3.5 times, and total net leverage will be 4.7 times.

Staples was last in market with a $350 million add-on term loan B priced at Libor plus 400 basis points to back its purchase of DEX Imaging. The original $2.9 billion term loan was issued at a discount of 99.75 in August 2017 alongside $1 billion of 8˝% unsecured bonds due September 2025 to back Sycamore Partners’ acquisition of the business.

Staples is a Framingham, Mass.-based business supplies distributor.

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