Dollar Tree entered into a credit agreement with JPMorgan as administrative agent, providing for $2.032 billion in senior credit facilities, consisting of a $1.25 billion revolving credit facility, of which up to $350 million is available for letters of credit, and a $782 million term loan facility.
According to a related 8-K filing, the revolving credit facility matures on April 19, 2023, subject to extensions permitted under the credit agreement. The term loan facility matures on April 19, 2020.
The loans under the revolving credit facility bear interest at an initial rate of LIBOR plus 1.25%, and the loans under the term loan bear interest at an initial rate of LIBOR plus 1.00%, subject to adjustment based on the company’s credit ratings and the company’s leverage ratio.
The company expects to use the net proceeds from a concurrent notes offering, together with cash on hand and the proceeds of borrowings under the senior credit facilities to redeem all of its outstanding 5.75% senior notes due 2023 and repay all of the outstanding loans under the company’s existing senior secured credit facilities.
The company will capitalize approximately $37 million of deferred financing costs and original issue discount, which will result in non-cash amortization over the term of the senior credit facilities and notes.
JPMorgan Chase, Wells Fargo Securities, Merrill Lynch, Fifth Third Bank, RBC Capital Markets and U.S. Bank were joint lead arrangers and joint bookrunners.
