Orchard Supply points to strengthened financial position

Orchard Supply Hardware Stores has announced additional progress in its efforts to strengthen its financial position through refinancing and reducing its debt.

The company closed on a new five-year Senior Secured Credit Facility consisting of a $120.0 million revolving credit facility and a $7.5 million FILO term loan, with Wells Fargo Capital Finance and Bank of America, N.A. The new facility replaces Orchard's existing $100.0 million Senior Secured Credit Facility.

During the past 12 months, Orchard reduced its long-term debt by about $93 million and secured funds to remodel Orchard stores, primarily through multiple sale-leaseback transactions of company-owned properties. Its Real Estate Secured Term Loan was paid off as of July 28, 2012.

"We are pleased with the progress we have made to strengthen the company's financial position, which includes substantially reducing debt and lowering our borrowing costs," stated Chris Newman, EVP and chief financial officer. "We are particularly pleased to have the new credit facility in place, which provides Orchard with additional borrowing capacity at better rates. We greatly appreciate the confidence that Wells Fargo and Bank of America have in our ability to manage and grow the company."

Moelis & Co. will lead the refinancing efforts of the Senior Secured Term Loan.