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JPMorgan Chase Agents $1.3B Credit Facility for Office Depot

April 20, 2020, 09:05 AM
Filed Under: Retail
Related: JPMorgan Chase

Office Depot, Inc., a leading provider of business services and supplies, products and technology solutions, today announced that it has refinanced its existing asset-based credit facility with a new five-year agreement (“credit facility”) and retired its Term Loan Credit Agreement due 2022 (“term loan”).

According to an SEC filing, several banks and other institutions were party to the loan including JPMorgan Chase Bank, N.A., as Administrative Agent, Wells Fargo Bank, National Association, Bank of America, N.A. and Truist Bank, as Syndication Agents, and Citizens Bank, N.A., Fifth Third Bank, National Association, PNC Bank, National Association, TD Bank, N.A., NYCB Specialty Finance Company, LLC, and U.S. Bank National Association, as Documentation Agents

“As validation of our strong financial position and balance sheet, we’ve taken actions to streamline our capital structure by repaying the term loan in full, reducing annual interest expense, and increasing and extending our committed credit facility to 2025,” said Gerry Smith, chief executive officer of Office Depot. “Combined with the $87 million in cash proceeds from the Timber note maturity in January, these actions further simplify our balance sheet and reinforce our liquidity position as we navigate the current environment created by the recent global health crisis that has unfolded in our nation,” he added.

The Company’s new $1.3 billion asset-based credit facility consists of a $1.2 billion revolving credit facility and a $100 million first-in, last-out (“FILO”) facility. This new credit facility matures in April 2025 and replaces the Company’s previous credit facility that was due to expire in May 2021.

Upon closing of the transaction, the Company borrowed a total of $400 million under the new credit facility. These proceeds, along with available cash on hand, were used to repay the remaining $388 million balance on the term loan and approximately $66 million in other debt. By eliminating the term loan in its entirety, the Company expects to save approximately $14 million in annual cash interest expense and $75 million in required annual amortization payments. The new credit facility was significantly oversubscribed with strong lender support and provides substantial financial flexibility to continue the Company’s transformation efforts.

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