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J.P. Morgan Securities Arranges $450MM Revolver for Sprouts Farmers Market

April 20, 2015, 07:15 AM
Filed Under: Retail

Sprouts Farmers Market announced that it has completed a new five-year, $450 million revolving credit facility to replace its existing term loan and revolving credit facility. The Company will utilize the initial drawing of $260 million under the new credit facility to pay off its existing $258 million term loan and transaction costs associated with the refinancing. Upon the completion of the refinancing, the Company will have approximately $260 million of total debt and $2.5 million of letters of credit outstanding under the new facility, which will mature on April 17, 2020.

The revolver has an initial drawn pricing of LIBOR plus 1.75 percent, as compared with LIBOR (with a floor of 1.00 percent) plus 3.00 percent under the previous term loan. At today's interest rates, this pricing would reduce the Company's annual interest expense by approximately $5 million.

"This refinancing reflects the significant progress we have made in deleveraging the Company," said Amin Maredia, chief financial officer of Sprouts Farmers Market. "While we plan to continue to self-fund our targeted 14 percent unit growth, this new facility preserves Sprouts' financial flexibility and reduces our ongoing debt service expense."

J.P. Morgan Securities LLC acted as sole bookrunner and lead arranger on the credit facility.

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