Office Depot Streamlines Capital Structure by Refinancing Existing Credit Facility and Repaying Term Loan
Office Depot, Inc. (“Office Depot,” or the “Company”) (NASDAQ: ODP), a leading provider of business services and supplies, products and technology solutions, today announced that it has refinanced its existing asset-based credit facility with a new five-year agreement (“credit facility”) and retired its Term Loan Credit Agreement due 2022 (“term loan”).
“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,” said Gerry Smith, chief executive officer of Office Depot. “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,” he added.
The Company’s new $1.3 billion asset-based credit facility consists of a $1.2 billion revolving credit facility and a $100 million first-in, last-out (“FILO”) facility. This new credit facility matures in April 2025 and replaces the Company’s previous credit facility that was due to expire in May 2021.
Upon closing of the transaction, the Company 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 the term loan and approximately $66 million in other debt. By eliminating the term loan in its entirety, the Company expects to save approximately $14 million in annual cash interest expense and $75 million in required annual amortization payments. The new credit facility was significantly oversubscribed with strong lender support and provides substantial financial flexibility to continue the Company’s transformation efforts.
About Office Depot, Inc.
Office Depot, Inc. (NASDAQ:ODP) is a leading provider of business services, products and technology solutions to small, medium and enterprise businesses, through a fully integrated B2B distribution platform of approximately 1,300 stores, online presence, and dedicated sales professionals and technicians. Through its banner brands Office Depot, OfficeMax, CompuCom and Grand&Toy, as well as others, the Company offers its customers the tools and resources they need to focus on their passion of starting, growing and running their business. For more information, visit news.officedepot.com and follow @officedepot on Facebook, Twitter and Instagram.