Office Depot enters into $1.3 billion of amended, restated facilities

By Sarah Lizee

Olympia, Wash., April 20 – Office Depot, Inc. amended and restated its credit agreement on Friday with JPMorgan Chase Bank, NA as administrative agent, providing for a $1.2 billion five-year revolver and a $100 million five-year first-in, last-out term loan facility, according to an 8-K filing with the Securities and Exchange Commission.

Specifically, the agreement provides U.S. borrowers with a revolver of up to $1.15 billion, which includes a letter-of-credit sub-facility of $400 million and a swingline sub-facility of $115 million, Canadian borrowers with a revolver of up to $50 million, which includes a letter-of-credit sub-facility of $25 million and a swingline sub-facility of $5 million, and the FILO term facility available to U.S. borrowers.

JPMorgan, Wells Fargo Bank, NA, Bank of America, NA and SunTrust Robinson Humphrey, Inc. are the joint lead arrangers and joint bookrunners.

Wells Fargo Bank of America and Truist Bank are syndication agents, and Citizens Bank, NA, Fifth Third Bank, NA, PNC Bank, NA, TD Bank, NA, NYCB Specialty Finance Co., LLC and U.S. Bank NA are documentation agents.

Revolving loans bear interest at Libor plus 200 basis points to 250 bps, and FILO term loans bear interest at Libor plus 350 bps to 400 bps, in each case based on average quarterly availability.

Each loan matures on April 17, 2025.

The company made an initial draw of $400 million, of which, together with cash on hand, about $388 million was used to repay in full all amounts outstanding under the credit agreement dated as of Nov. 8, 2017 with Goldman Sachs Lending Partners LLC as administrative agent and to repay about $66 million of other debt.

Revolving loan proceeds may be used for working capital needs and general corporate purposes.

The revolver includes a letter-of-credit sub-facility of $400 million and a swingline sub-facility of $115 million.

Borrowers may elect to increase the aggregate amount of commitments under the revolver by up to $250 million.

There is a springing financial covenant that is triggered when aggregate availability under the revolving loan facility is below a certain threshold.

Office Depot is a Boca Raton, Fla.-based provider of office supplies and business products and services.

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