SUBSEQUENT EVENTS |
6 Months Ended |
|---|---|
Jul. 30, 2016 | |
| Subsequent Events [Abstract] | |
| SUBSEQUENT EVENTS |
SUBSEQUENT EVENTS
Corporate Restructuring
As part of the Company's ongoing efforts to integrate its support functions through a shared services model, in August 2016 the Company eliminated 370 positions, including 100 vacant positions, at its Family Dollar Store Support Center in Matthews, North Carolina. Related to this, the Company expects to incur pre-tax expense of approximately $6.0 million during fiscal 2016 for one-time severance-related benefits.
Debt Refinancing
On August 30, 2016, the Company entered into an amendment (the "Amendment") to the New Senior Secured Credit Facilities. The Amendment reduced the applicable interest rate margin with respect to the Term Loan A tranche of the Company's New Term Loan Facilities, which had $937.5 million outstanding immediately prior to the date of Amendment, and the Company’s New Revolving Credit Facility, which was undrawn other than letters of credit immediately prior to the date of the Amendment. The reduction in the interest rate margins was accomplished by replacing the existing Term A Loan tranche with a new Term Loan A-1 tranche and the New Revolving Credit Facility with new revolving facility commitments (the “Tranche A Revolving Credit Facility”) that, except as set forth below, have terms identical to the existing Term Loan A tranche and New Revolving Credit Facility. As a result, the total amount borrowed under the Amendment is unchanged from the total amount borrowed under the New Senior Secured Credit Facilities.
Loans made under the Tranche A Revolving Credit Facility or the Term Loan A-1 tranche will bear interest at LIBOR plus 1.75% annually (or a base rate plus 0.75%) until the Company delivers its quarterly compliance certificate to the lenders outlining its secured net leverage ratio for the quarter ended January 28, 2017. Prior to such date, the Company will pay a commitment fee on the unused portion of the Tranche A Revolving Credit Facility of 0.30% annually. Thereafter, loans made under the Tranche A Revolving Credit Facility or the Term Loan A-1 tranche will bear interest at LIBOR plus 1.50% to 2.25% or at a base rate plus 0.50% to 1.25% and the Company will pay a commitment fee on the unused portion of the Tranche A Revolving Credit Facility ranging from 0.25% to 0.375% (in each case, determined based on the Company’s secured net leverage ratio).
Commencing on January 13, 2017, loans made under the Term Loan A-1 tranche will require quarterly amortization payments of 1.25% of the original principal amount thereof until April 15, 2017 and 1.875% thereafter.
The obligations under the Term Loan A-1 tranche and the Tranche A Revolving Credit Facilities are secured by the same collateral and subject to the same guarantees as the loans under the New Senior Secured Credit Facilities.
The restrictive covenants and events of default in the Amendment are unchanged from the provisions in the New Senior Secured Credit Facilities.
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