Staples refinancing to include $750 million of new secured debt, $1.38 billion unsecured debt

By Paul A. Harris

Portland, Ore., March 22 – Staples Inc. is planning to bring $750 million new secured debt and $1,375,000,000 of unsecured debt as part of a refinancing effort, according to a market source.

Goldman Sachs & Co. LLC will be lead left on the debt.

The refinancing also includes a $3.2 billion term loan set to launch at a bank meeting on Tuesday.

UBS Investment Bank is lead left on the loan.

UBS, Goldman Sachs, 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 loan.

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 the 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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