8-KMaterial AgreementsOther EventsExhibits & Filings

DOLLAR GENERAL CORP 8-K Report, Material Agreement (Jul 3, 2012)

Filed July 3, 2012For Securities:DG

Summary

Dollar General Corporation (DG) filed an 8-K on July 3, 2012, announcing the entry into a material definitive agreement for the issuance and sale of $500 million in aggregate principal amount of 4.125% Senior Notes due 2017. The primary purpose of this offering is to redeem all of the company's outstanding 11.8725%/12.625% senior subordinated toggle notes due 2017. This move represents a significant refinancing effort by Dollar General, aimed at reducing its interest expense by replacing higher-cost debt with lower-cost debt.

Key Highlights

  • 1Dollar General entered into an Underwriting Agreement on June 27, 2012, to issue $500 million of 4.125% Senior Notes due 2017.
  • 2The net proceeds from the new notes will be used to redeem all outstanding 11.8725%/12.625% senior subordinated toggle notes due 2017.
  • 3This refinancing is expected to lower the company's overall interest expense.
  • 4The offering is being made under a previously filed Registration Statement on Form S-3.
  • 5Settlement for the new notes is anticipated on July 12, 2012.
  • 6Kohlberg Kravis Roberts & Co. L.P. (KKR) and Goldman, Sachs & Co., significant shareholders through their investment in Buck Holdings, L.P., acted as underwriters.
  • 7Certain underwriters or their affiliates may benefit from the transaction as holders of the existing notes.

Frequently Asked Questions

Dollar General is issuing $500 million in new Senior Notes due 2017 at a lower interest rate (4.125%) to redeem its existing, higher-interest Senior Subordinated Toggle Notes due 2017 (which had rates of 11.8725% and 12.625%).

The primary reason is to reduce its cost of borrowing. By replacing high-interest debt with lower-interest debt, the company aims to lower its overall interest expenses, which can improve profitability.

The settlement for the new notes is expected to occur on July 12, 2012. The proceeds will then be used to redeem the outstanding existing notes.

Yes, KKR and Goldman Sachs, through their investment vehicle Buck Holdings, L.P., are significant shareholders in Dollar General. Additionally, some underwriters or their affiliates are holders of the existing notes that will be redeemed, meaning they will receive a portion of the proceeds from the new note offering.