Orchard Supply Hardware Stores Corporation, a neighborhood hardware and garden store focused on paint, repair and the backyard, announced additional progress in the company’s efforts to strengthen its financial position through refinancing and reducing its debt.

The company successfully closed on a new five-year senior secured credit facility consisting of a $120 million revolving credit facility and a $7.5 million FILO term loan, with Wells Fargo Capital Finance and Bank of America. The new facility replaces the company’s existing $100 million senior secured credit facility.

During the past 12 months, the company reduced its long-term debt by approximately $93 million and secured funds to remodel Orchard stores, primarily through the execution of multiple sale-leaseback transactions of company-owned properties. The company’s real estate secured term loan was paid off in its entirety as of July 28, 2012.

“We are proud to lead the Orchard Supply Hardware revolver and are excited to be a valued lender as the company solidifies its balance sheet,” said Keith Vercauteren, head of the Retail Finance Division of Wells Fargo Capital Finance. “Through ongoing collaboration, we look forward to enhancing our relationship in continued support of the company’s success.”

The company also announced that it has engaged Moelis & Co. to lead the refinancing efforts of the senior secured term loan.

Wells Fargo Capital Finance serves as administrative agent and collateral agent and Bank of America serves as syndication agent, together providing all of the commitments for the new facility. Wells Fargo Capital Finance and Merrill Lynch, Pierce Fenner & Smith acted as joint lead arrangers and joint bookrunners. The new facility matures on the earlier of October 17, 2017, and the date which is 90 days prior to the final maturity date of any portion of the company’s senior secured term loan. The new facility also contains an uncommitted accordion provision that, subject to certain conditions, allows the company to expand the facility by up to $50 million. As of the closing, the company had $46 million of cash borrowings under the new facility, $10.8 million of letters of credit backed by the facility and $58 million in available borrowing capacity.

The interest rate on the revolving credit facility is equal to LIBOR plus an applicable margin ranging from 1.50% to 2.00% based on availability under the line, which compares to a range of LIBOR plus 2.50% to 3.25% on the company