Bank of New York Co. is arranging
$1.35 billion in financing for CVS Corp., which agreed to buy
1,260 Eckerd drug stores from J.C. Penney Co., bankers familiar
with the deal said.
The financing includes a $675 million, 364-day revolving
credit that has a 7.5 basis-point fee if the loan isn’t used and
a $675 million five-year term loan with a 10 basis-point fee.
Both will pay interest of 37.5 basis points more than the London
interbank offered rate if drawn, and there is an additional
5 basis-point fee if at least half of the credit package is used,
bankers said. A basis point is 0.01 percentage point.
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The loans are intended to provide backup for CVS’s
commercial paper and aren’t expected to be used, bankers said.
The Woonsocket-based company, which owns drug
stores under its own name and also the Revco chain, is getting
the loans in conjunction with its purchase this June of the
Eckerd drugstores, which the company expects will make it the
largest chain in the U.S., surpassing Walgreen Co.
Bloomberg News
