The distributor of business and industrial products yesterday said it borrowed the funds against its revolving credit facility to increase cash and “preserve financial flexibility” during the coronavirus pandemic.

When it comes to market uncertainty caused by the COVID-19 pandemic, W.W. Grainger Inc. chairman and CEO D.G. Macpherson says he wants to be extra careful with the company’s financial position.


D.G. Macpherson, CEO, W.W. Grainger

Macpherson said Tuesday that Grainger has decided to draw down $1 billion from its unsecured revolving credit facility, bringing its cash on hand to approximately $1.5 billion.

Macpherson emphasized that the borrowed funds will help Grainger to guard against further market disruption resulting from the spread of COVID-19, the disease caused by the novel coronavirus that has disrupted business operations in the United States and worldwide.

Grainger, whose ecommerce sites include its flagship for enterprise customers and for smaller businesses, does about 71% of its annual sales through digital channels, or approximately $8.2 billion out of a total of $11.5 billion in 2019 sales.


A ‘proactive measure’

“Grainger’s financial position is strong,” Macpherson said in announcing the loan. “However, in an abundance of caution and as a proactive measure, we are taking prudent actions to increase our liquidity and financial flexibility. We remain committed to providing superior customer service and maintaining high levels of inventory and to support our customers through this pandemic and beyond.”

He added, “Our priority remains the health and safety of our team members and customers as we continue to navigate this uncertain period.”

Grainger said its revolving credit facility allows it to borrow up to $1.25 billion, leaving it with $250 million still available. It said the principal balance of the loan is due on Feb. 14, 2025; Grainger added that it does “not have any material debt maturities prior to that date.”

Grainger also noted in a filing with the U.S. Securities and Exchange Commission last week that it has the ability under its revolving credit facility to request an increase in its borrowing limit to $1.875 billion.


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