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Staples Sweetens Terms on $1.58 Billion Loan
to Lure Investors. (up to 11.55%, protections added)
Staples Seeks $1.8 Billion Loan, Floats Double-Digit Yield” . Banks led by Morgan Stanley are initiating a $1.8 billion leveraged loan sale for Staples Inc., as the office supplier aims to refinance its existing debt. The proceeds, combined with $2.35 billion of other secured debt, will be used to refinance other borrowings.Early pricing discussions suggest that the debt could carry interest of up to 525 basis points over the Secured Overnight Financing Rate (SOFR) and be sold at a discounted price of 98 cents to 98.5 cents on the dollar. This pricing would translate to a yield of at least 10.5%. Staples has more than $7.5 billion in outstanding debt, including a $286 million term loan due in September.
Investor demand for risky debt has been strong, with high-yield bond sales reaching their highest levels since 2021, and more than $30 billion of leveraged loans launched recently.
The deal stands out in the corporate credit market due to its attractive yield and investor protections. Staples’ move to refinance its debt reflects the current favorable conditions for borrowers in the market. Morgan Stanley and Staples have not provided official comments on the matter.
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