According to an 8K filed with the SEC, JPMorgan Chase served as administrative agent on the refinancing of Office Depot’s existing asset-based credit facility, which now consists of a $1.2 billion revolving credit facility and a $100 million first-in, last-out facility. This new credit facility matures in April 2025 and replaces Office Depot’s previous credit facility, which was due to expire in May 2021.
Wells Fargo, Bank of America and Truist Bank served as syndication agents while Citizens Bank, Fifth Third Bank, PNC, TD Bank, NYCB Specialty Finance Company and U.S. Bank served as documentation agents, according to the 8K.
Upon closing of the transaction, Office Depot 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 a term loan agented by Goldman Sachs Lending Partners, according to the 8K. The remaining proceeds were used to repay approximately $66 million in other debt. By eliminating the term loan in its entirety, Office Depot expects to save approximately $14 million in annual cash interest expense and $75 million in required annual amortization payments.
“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,” Gerry Smith, CEO of Office Depot, said. “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.”
Office Depot is an office supply retail chain.