Daily News: June 4, 2012

Ace Hardware Completes Early Debt Refinance

Ace Hardware Corporation, a retailer-owned hardware cooperative, announced the early redemption of its outstanding 9.125% senior secured notes originally maturing June 1, 2016. The successful refinance was driven by the April 13, 2012 closing of a new five-year $600 million senior secured credit facility composed of a new $400 million revolving credit facility and a new $200 million term loan. In addition to the early redemption of the senior notes, the new facility also replaced an existing $300 million senior secured revolving credit facility.

The pricing on the new $600 million facility will initially be LIBOR plus an applicable credit margin, subject to adjustment based on Ace’s leverage ratio.

Bank of America served as administrative agent on the transaction while Bank of America, JP Morgan and US Bank served as joint lead arrangers and joint bookrunners.

To take advantage of the favorable interest rate environment, Ace entered into an interest rate swap derivative agreement to fix the interest rate of the $200 million term loan at 1.13% plus an applicable credit margin, representing an all-in rate of 3.38% based on today’s leverage ratio tier.

Ray Griffith, president and CEO of Ace Hardware, said, “This successful refinance positions Ace for significant future interest savings while reflecting our strong financial position and ability to access the financial market at attractive terms.”