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JPMorgan Chase Closes $2.32B in Credit Facilites for Dollar Tree

April 23, 2018, 07:21 AM
Filed Under: Retail

Dollar Tree, Inc. entered into a credit agreement with JPMorgan Chase Bank, N.A., as administrative agent, providing for $2.32 billion in senior credit facilities, consisting of a $1.25 billion revolving credit facility, of which up to $350 million is available for letters of credit, and a $782 million term loan facility.

The Company borrowed the entire $782 million Term Loan Facility on April19, 2018. The Revolving Credit Facility matures on April19, 2023, subject to extensions permitted under the Credit Agreement. The Term Loan Facility matures on April19, 2020.

The loans under the Revolving Credit Facility bear interest at an initial interest rate of LIBOR plus 1.25% and the loans under the Term Loan Facility bear interest at an initial interest rate of LIBOR plus 1.00%, subject to adjustment based on (i)the Company’s credit ratings and (ii)the Company’s leverage ratio. The Company expects to pay certain commitment fees in connection with the Revolving Credit Facility. The Senior Credit Facilities allow voluntary repayment of outstanding loans at any time without premium or penalty, other than customary “breakage” costs with respect to LIBOR loans. There is no required amortization under the Senior Credit Facilities.

The Senior Credit Facilities contain a number of affirmative and negative covenants that, among other things, and subject to certain significant baskets and exceptions, restrict the Company’s ability to incur subsidiary indebtedness, incur liens, sell all or substantially all of the Company’s (including the Company’s subsidiaries’) assets and consummate certain fundamental changes. The Senior Credit Facilities also contain a maximum rent-adjusted leverage ratio covenant and a minimum fixed charge coverage ratio covenant. The Credit Agreement provides for certain events of default which, if any of them occurs, would permit or require the loans under the Senior Credit Facilities to be declared due and payable and the commitments thereunder to be terminated.

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