HD Supply Seeks to Refinance Term Loan, ABL Credit Facilities

HD Supply Inc., the industrial distribution company partly owned by Carlyle Group LP, Bain Capital LLC and Clayton, Dubilier & Rice LLC, is seeking to refinance both its asset-based credit line and senior secured term loan facility.

In addition to the refinancing the company is marketing a private offering of first-lien notes due 2019 and second-lien notes that mature in 2020, Atlanta-based HD Supply said today in a statement.

Proceeds from a new covenant-lite term loan B, along with drawings under a new $1.5 billion asset-based revolving line of credit and the new debt, will be used to refinance the company’s 12 percent senior notes due in 2014, said the person, who declined to be identified because the terms are private. HD Supply issued $2.5 billion of the notes in 2009, according to data compiled by Bloomberg.

Bank of America Corp., Goldman Sachs Group Inc., Barclays Plc, Credit Suisse Group AG, Deutsche Bank AG, JPMorgan Chase & Co., Wells Fargo & Co. and UBS AG are arranging the term loan portion and will host a lender meeting tomorrow at 2:00 p.m. in New York, the person said.

GE Capital Markets, the lending unit of General Electric Co., is arranging the ABL piece and will host a lender call tomorrow at 10:30 a.m. in New York to begin marketing the debt, the person said.

Quiana Pinckney, a spokeswoman for HD Supply, didn’t immediately respond to an e-mail seeking comment.

Carlyle, Bain and Clayton, Dubilier & Rice acquired HD Supply for $8.5 billion in August 2007, according to data compiled by Bloomberg.

In a revolving credit facility, money can be borrowed again once it’s repaid; in a term loan it can’t. An asset-based financing is secured by the borrower’s inventory and accounts receivables.

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