September 18, 2013 / 3:58 PM / in 4 years

RLPC-Sears sets price talk on $1 bln refi credit

2 Min Read

Sept 18 (Reuters) - Retailer Sears Holdings Corp set price guidance on its new $1 billion term loan earmarked to pay down revolver borrowings at the company, sources told Thompson Reuters LPC.

The new first-lien term loan is guided at LIB+450-475 basis points, with a 1 percent Libor floor and a 99 original issue discount.

The term loan will mature June 30, 2018, and will carry 101 soft call protection for one year.

Bank of America Merrill Lynch is sole lead. Commitments are due September 27.

The new loan falls under Sears' existing credit agreement, inked in 2011. The existing credit includes a $3.275 billion asset-based revolver maturing in April 2016. The revolver pays at a range of LIB+200 to LIB+250, based on a leverage grid. Commitment fees are in a range of 37.5 basis points to 62.5 basis points based on usage.

The new term loan is expected to be secured on a first-lien basis on the same collateral as the revolver.

The existing credit agreement is secured by a first-lien on most of Sears' domestic inventory and credit card and pharmacy receivables, and is subject to a borrowing base formula to determine availability.

At August 3, Sears had $1.5 billion of borrowings outstanding under the existing credit.

Sears Roebuck Acceptance Corp and Kmart Corporation are the borrowers.

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