8-KMaterial AgreementsExhibits & Filings

DOLLAR GENERAL CORP 8-K Report, Material Agreement (Feb 1, 2023)

Filed February 1, 2023For Securities:DG

Summary

Dollar General Corporation (DG) has entered into two significant credit agreements. First, a new $750 million unsecured 364-day revolving credit facility was established on January 31, 2023, providing short-term liquidity. This facility has an initial interest rate margin of 1.035% for Adjusted Term SOFR loans and a 0.090% facility fee. Second, the company amended its existing $2.0 billion unsecured revolving credit facility, originally dated December 2, 2021. Key changes include replacing the LIBOR benchmark with Adjusted Term SOFR for interest rate calculations and updating certain administrative and lending parties. Both agreements contain customary covenants and events of default, and are designed to provide financial flexibility to the company.

Key Highlights

  • 1DG entered into a new $750 million unsecured 364-day revolving credit facility on January 31, 2023, to enhance short-term liquidity.
  • 2The new 364-day facility bears interest at Adjusted Term SOFR plus a 1.035% margin and a 0.090% facility fee, subject to ratings adjustments.
  • 3DG also amended its existing $2.0 billion unsecured revolving credit facility, dated December 2, 2021.
  • 4The amendment to the existing facility replaced LIBOR with Adjusted Term SOFR as the benchmark interest rate.
  • 5Both credit facilities contain standard affirmative and negative covenants, including restrictions on liens, asset sales, and subsidiary debt.
  • 6Financial covenants such as minimum fixed charge coverage ratio and maximum leverage ratio are included in both agreements.
  • 7The company has access to significant unsecured revolving credit facilities totaling $2.75 billion ($750 million new + $2.0 billion amended), offering substantial financial flexibility.

Frequently Asked Questions

The new unsecured 364-day credit agreement, providing a $750 million revolving credit facility, is intended to provide Dollar General with short-term liquidity and financial flexibility.

Both the new 364-day facility and the amended 2021 facility primarily use Adjusted Term SOFR as the interest rate benchmark, plus an applicable margin. The rates are subject to adjustments based on Dollar General's debt ratings. A facility fee is also payable on unused commitments.

Yes, both agreements include customary affirmative and negative covenants that restrict the company's ability to incur additional liens, sell substantially all assets, or change its lines of business. They also include financial covenants requiring the maintenance of minimum fixed charge coverage and maximum leverage ratios.

Following these agreements, Dollar General has a total of $2.75 billion in unsecured revolving credit capacity available ($750 million from the new 364-day facility and $2.0 billion from the amended 2021 credit agreement).