Dollar Tree adds $500M term loan due 2029
Dollar Tree, Inc. entered into a new $500 million term loan credit facility with Bank of America and other lenders.
Rhea-AI Filing Summary
Dollar Tree, Inc. entered into a new $500 million term loan credit facility with Bank of America and other lenders. The facility matures on March 19, 2029 and initially bears interest at the Term SOFR Rate plus 1.00%, with the margin adjustable based on Dollar Tree’s credit ratings and leverage ratio.
The loan has no required amortization and can be prepaid voluntarily at any time without premium or penalty, aside from customary SOFR breakage costs. It includes covenants limiting additional subsidiary debt, liens, major asset sales and fundamental changes, and requires compliance with maximum leverage and minimum fixed charge coverage ratios.
In connection with the new term loan, all commitments and obligations under Dollar Tree’s existing 364‑day revolving credit agreement, dated March 21, 2025, were terminated upon its expiration on March 20, 2026.
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Insights
Dollar Tree replaces a short-term revolver with a $500M term loan maturing 2029, tightening leverage covenants.
Dollar Tree has arranged a $500 million term loan facility maturing on March 19, 2029, priced at Term SOFR plus 1.00% initially. The rate grid linked to credit ratings and leverage means financing costs will move with the company’s risk profile and balance sheet strength.
The absence of scheduled amortization and ability to prepay without premium provide flexibility in managing cash flows. At the same time, maximum leverage and minimum fixed charge coverage covenants introduce clear balance sheet discipline. The expiration and termination of the prior 364‑day revolving credit agreement on March 20, 2026 indicate a shift from short-term revolving liquidity to committed term debt funding.
Overall, this is a structural change in Dollar Tree’s borrowing mix rather than a transformational event. The economic impact will depend on the company’s future leverage levels and credit ratings, which directly influence the interest margin and covenant headroom over the life of the facility.
8-K Event Classification
4 items: 1.01, 1.02, 2.03, 9.01
4 items
Item 1.01
Entry into a Material Definitive Agreement
Business
The company signed a significant contract such as a merger agreement, credit facility, or major partnership.
Item 1.02
Termination of a Material Definitive Agreement
Business
A significant contract was terminated, which may affect business operations or revenue.
Item 2.03
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement
Financial
The company incurred a new significant debt or off-balance-sheet obligation.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, or exhibit attachments filed with this report.
FAQ
What new credit facility did Dollar Tree (DLTR) enter into?
Dollar Tree entered a $500 million term loan credit facility with Bank of America and other lenders. The loan provides committed funding, features no scheduled amortization, and includes flexible voluntary prepayment rights alongside standard financial and restrictive covenants.
When does Dollar Tree’s new $500 million term loan mature?
The $500 million term loan matures on March 19, 2029, giving Dollar Tree multi‑year funding visibility. This longer maturity replaces a shorter 364‑day revolving credit agreement, shifting its debt profile toward longer‑term, more stable capital structure arrangements.
How is interest determined on Dollar Tree’s new term loan facility?
Interest is based on the Term SOFR Rate plus an initial 1.00% margin. The margin can adjust over time depending on Dollar Tree’s credit ratings and leverage ratio, linking borrowing costs to its financial performance and balance sheet condition.
Can Dollar Tree prepay the $500 million term loan without penalties?
Dollar Tree can voluntarily repay outstanding loans at any time without premium or penalty, apart from customary SOFR breakage costs. This gives management flexibility to reduce debt early if cash is available or refinancing conditions become attractive.
What happened to Dollar Tree’s previous 364-day revolving credit agreement?
The existing 364‑day revolving credit agreement expired on March 20, 2026. Upon expiration, all commitments under that facility were terminated and all obligations were fulfilled, effectively replacing short‑term revolving liquidity with the new $500 million term loan.
What key covenants are included in Dollar Tree’s new term loan?
The facility includes a maximum leverage ratio covenant and a minimum fixed charge coverage ratio. It also restricts subsidiary indebtedness, liens, major asset sales, and certain fundamental changes, subject to specified baskets and exceptions, to help maintain lender protections.
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 19, 2026
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||
| (Address of principal executive offices) | (Zip Code) | |||||||
(757 ) 321-5000
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01. Entry Into a Material Definitive Agreement.
Term Loan Credit Agreement
On March 19, 2026, Dollar Tree, Inc., a Virginia corporation (the “Company”), entered into a credit agreement (the “Term Loan Credit Agreement”), with Bank of America, N.A., as agent, and the banks, financial institutions and other institutional lenders from time to time party thereto, providing for a $500 million term loan credit facility (the “Term Loan Facility”).
The Term Loan Facility matures on March 19, 2029.
Loans under the Term Loan Facility will bear interest at an initial interest rate equal to the Term SOFR Rate (as defined in the Term Loan Credit Agreement) plus 1.00%, subject to adjustment based on (i) the Company’s credit ratings and (ii) the Company’s leverage ratio. The Term Loan Facility allows voluntary repayment of outstanding loans at any time without premium or penalty, other than customary “breakage” costs with respect to SOFR loans. There is no required amortization under the Term Loan Facility.
The Term Loan Facility contains a number of affirmative and negative covenants that, among other things, and subject to certain significant baskets and exceptions, restrict the Company’s ability to incur subsidiary indebtedness, incur liens, sell all or substantially all of the Company’s (including the Company’s subsidiaries’) assets and consummate certain fundamental changes. The Term Loan Facility also contains a maximum leverage ratio covenant and a minimum fixed charge coverage ratio covenant. The Term Loan Credit Agreement provides for certain events of default which, if any of them occurs, would permit or require the loans under the Term Loan Facility to be declared due and payable and the commitments thereunder to be terminated.
The agent and lenders under the Term Loan Credit Agreement (the “Lenders”) and their respective affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, investment research, principal investment, hedging, financing and brokerage activities. The Lenders and their respective affiliates have performed, and may in the future perform, various commercial banking, investment banking, hedging, brokerage and advisory services for the Company for which they have received, and will receive, customary fees and expenses.
The foregoing description of the Term Loan Credit Agreement is not complete and is qualified in its entirety by reference to the full text of the Term Loan Credit Agreement, a copy of which is filed as Exhibit 10.1 hereto, and incorporated herein by reference.
Item 1.02. Termination of a Material Definitive Agreement.
The information provided in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 1.02.
Termination of the Existing Credit Agreement
In connection with entry into the Term Loan Credit Agreement as described in Item 1.01 above, upon its expiration on March 20, 2026, all commitments have been terminated and all obligations have been fulfilled under the Company’s existing 364-day revolving credit agreement, dated as of March 21, 2025, as amended, restated, supplemented or otherwise modified from time to time, by and among the Company, as borrower, the banks and financial institutions from time to time party thereto, the issuers of letters of credit party thereto and JPMorgan Chase Bank, N.A., as administrative agent.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.
The information provided in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description of Exhibit | |||||||
| 10.1 | Credit Agreement, dated as of March 19, 2026, by and among Dollar Tree, Inc., Bank of America, N.A., as agent, and the banks, financial institutions and other institutional lenders from time to time party thereto. | |||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| DOLLAR TREE, INC. | ||||||||
| Date: March 23, 2026 | By: | /s/ John S. Mitchell, Jr. | ||||||
| John S. Mitchell, Jr. | ||||||||
| Chief Legal Officer | ||||||||