Office Depot expands revolver to $1.25 billion, amends covenants

By Marisa Wong

Madison, Wis., Nov. 8 - Office Depot, Inc. entered into a third amendment to its amended and restated credit agreement dated May 25, 2011 to increase its existing $1 billion revolving credit facility to $1.25 billion, to account for its merger with OfficeMax Inc. and to modify some covenants for greater operational flexibility, according to an 8-K filing with the Securities and Exchange Commission.

The amendment, which became effective on Nov. 5, restates the company's prior credit agreement with JPMorgan Chase Bank, NA, London Branch as European administrative agent and European collateral agent, JPMorgan Chase Bank, NA as administrative agent and U.S. collateral agent, Bank of America, NA as syndication agent and Citibank, NA and Wells Fargo Bank, NA as documentation agents.

The amount that can be drawn under the restated $1.25 billion asset-based, multicurrency revolver will be determined based on accounts receivable, inventory and credit card receivables. Any existing letters of credit and loans issued and outstanding under the prior agreement will remain issued and outstanding under the amended agreement.

In addition, a total undrawn amount of $37.6 million of letters of credit previously issued under a credit agreement of OfficeMax will now be outstanding under Office Depot's restated credit agreement. OfficeMax's credit agreement was terminated immediately before the merger was completed.

The restated facility includes an up to $200 million sub-facility that is available to the company and some of its European subsidiaries and an up to $400 million letter-of-credit sub-facility, as well as an up to $125 million swingline loan for the company and an up to $25 million additional swingline loan for the European subsidiaries.

Total commitments may be increased by up to $250 million.

All loans may be borrowed, repaid and re-borrowed from time to time until May 25, 2016, the maturity date, which is unchanged from the prior credit agreement.

Borrowings will bear interest at adjusted Libor plus a margin based on availability.

The company is a Boca Raton, Fla.-based supplier of office products and services.

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