Item 1.01. Entry into a Material Definitive Agreement.
Amendment to Senior Secured Credit Facilities
On September 22, 2016, Dollar Tree, Inc. (the Company), entered into Amendment No. 4 (the Fourth Amendment) to that certain credit agreement, dated as of March 9, 2015, with JPMorgan Chase Bank, N.A., as administrative agent, and certain lenders party thereto (as previously amended, the Existing Credit Agreement and, as amended by the Fourth Amendment, the Amended Credit Agreement). The Fourth Amendment provides for the incurrence of $1,275 million in aggregate principal amount of additional Term A-1 Loans (the Additional Term A-1 Loans) and $750 million in aggregate principal amount of Term B-3 Loans (the Term B-3 Loans). The proceeds of the Additional Term A-1 Loans and the Term B-3 Loans were used to refinance a portion of the existing Term B-1 Loans made under the Existing Credit Agreement, including by converting a portion of the Term B-1 Loans into Term B-3 Loans. In addition, the Company used $242 million of cash on hand to prepay the remainder of the Term B-1 Loans. As a result, the total amount borrowed under the Amended Credit Agreement is $242 million less than the total amount borrowed under the Existing Credit Agreement.
The Additional Term A-1 Loans have terms identical to the Term A-1 Loans made under the Existing Credit Agreement. The Term B-3 Loans have terms identical to the Term B-1 Loans made under the Existing Credit Agreement, except as set forth below.
The Term B-3 Loans will bear interest at LIBOR plus 2.50% per annum (or a base rate plus 1.50%).
Commencing on January 13, 2017, the Term B-3 Loans will require quarterly amortization payments of 0.25% of the original principal amount thereof until maturity.
The Additional Term A-1 Loans and the Term B-3 Loans are secured by the same collateral and subject to the same guarantees as the other classes of loans under the Credit Agreement.
The restrictive covenants and events of default in the Amended Credit Agreement are substantially the same as the provisions in the Existing Credit Agreement.
The foregoing description of the Fourth Amendment and the Amended Credit Agreement is not intended to be complete and is qualified in its entirety by reference to the Fourth Amendment, a copy of which is attached hereto as Exhibit 10.1, and incorporated herein by reference.
In connection with Amendment No. 3, dated as of August 30, 2016, to the Credit Agreement, dated as of March 9, 2015, among the Company and the other parties thereto (the Third Amendment), the terms of which were previously disclosed in the Companys Form 8-K filed on August 31, 2016, and the Fourth Amendment, the Company will accelerate the expensing of approximately $27 million of amortizable non-cash deferred financing costs and expense approximately $3 million in transaction-related costs. The Company expects the annual interest savings resulting from the recently completed Third Amendment and Fourth Amendment and the $242 million prepayment of the Term B-1 Loans will be approximately $28 million.