Staples Said to Seek Office Depot Loan Typical for Junk Debt

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Staples Inc. is seeking a type of loan sold typically to investors that buy junk-rated debt to finance its acquisition of Office Depot Inc.

The supplier of office products is planning to raise a $2.75 billion six-year financing in the form of a term loan B, debt sold by companies with below investment-grade ratings, according to a person with knowledge of the deal, who asked not to be identified without authorization to speak publicly. A meeting to start marketing the debt is scheduled for April 7.

Staples said in February it was buying Office Depot for about $6.3 billion, a deal that will reduce the U.S. office-supply industry to a single major chain. Standard & Poor’s said that month it may lower the Framingham, Massachusetts-based company’s BBB- investment-grade rating to junk because of the purchase. S&P grades Office Depot B-, or six levels below investment-grade.

Mark Cautela, a spokesman for Staples, declined to comment.

Barclays Plc, Bank of America Corp., Wells Fargo & Co. and HSBC Holdings Plc are arranging the financing, which also includes a $3 billion five-year revolving credit line, the person said.

Term loan Bs are typically sold to investors such as hedge funds, mutual funds and collateralized loan obligations.

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