Dollar General Sells $1.3 Billion of Bonds, Plans Loan Offering

Dollar General Corp. (DG), the discount retailer acquired by KKR & Co. in 2007, sold $1.3 billion of bonds and is planning to issue $1.9 billion of loans as it seeks to refinance senior secured borrowings.

The company issued $900 million of 3.25 percent, 10-year notes to yield 155 basis points more than similar-maturity Treasuries and $400 million of 1.875 percent, five-year securities at a relative yield of 120 basis points, according to data compiled by Bloomberg. The debt is expected to be rated Baa3, the lowest level of investment grade, by Moody’s Investors Service.

The bank debt is expected to consist of a $1 billion term loan and an $850 million cash flow-based revolving credit line, each due in five years, Dollar General said today in a statement distributed by Business Wire.

Dollar General, based in Goodlettsville, Tennessee, plans to use proceeds from the term loan and the note sale to pay off a senior secured credit pact and for general corporate purposes, according to the statement.

Bank of America Corp., Citigroup Inc., Goldman Sachs Group Inc., JPMorgan Chase & Co., U.S. Bancorp and Wells Fargo & Co. arranged the note offering, Bloomberg data show.

June Sale

Dollar General previously sold debt in June, issuing $500 million of 4.125 percent, five-year debentures to yield 340.6 basis points more than benchmarks, Bloomberg data show. The bonds traded at 107.5 cents on the dollar to yield 2.28 percent on March 26, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. A basis point is 0.01 percentage point.

Dollar General had $2.77 billion of total debt as of Feb. 1, including $1.96 billion of loans, $500 million of notes and a $1.2 billion asset-based revolver with $873.4 million available for borrowing, according to a March 25 regulatory filing.

Under a revolver, money can be borrowed again once it’s repaid; in a term loan, it can’t.

To contact the reporters on this story: Sarika Gangar in New York at; Christine Idzelis in New York at

To contact the editors responsible for this story: Alan Goldstein at; Faris Khan at

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