October 2, 2019
Office Depot, Inc. announced yesterday, that one of its subsidiaries has secured a three-month bridge loan facility to refinance its existing non-recourse debt obligation, allowing the company to cost effectively align the bridge loan’s maturity date with the associated timber note receivable due 29 January 2020.
The borrower is an existing special purpose indirect subsidiary of Office Depot. The $735 million (€673 million) bridge loan provided by Wells Fargo Bank, National Association, accrues interest at LIBOR plus 0.75 percent per annum from the period of 31 October 2019 through 29 January 2020. The proceeds of the bridge loan will be used to refinance the existing $735 million (€673 million) non-recourse debt obligation scheduled to mature on 31 October 2019. Office Depot is not a party to the bridge loan agreement nor subject to its terms.
The maturity date of the bridge loan coincides with the maturity date of Office Depot’s $817.5 million (€748.7 million) timber note receivable due on 29 January 2020. Upon final maturity of both instruments, Office Depot expects to receive a pre-tax net cash payment of approximately $82.5 million (€75.5 million).
Office Depot explained that the non-recourse debt and associated timber note receivable were part of the consideration received by OfficeMax Incorporated in the sale of its legacy timberland assets in 2004 and were acquired by Office Depot as part of the 2013 merger of Office Depot and OfficeMax.
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