Forward-thinking finance approach delivers outstanding cost savings for Home Depot
Published: Sep 2025
Best Funding Solution
Overall Winner
The Home Depot Inc.
Photo of Alison Livesey, J.P. Morgan collected the award on behalf of Home Depot.
Treasury Team
USA The Home Depot is the world’s largest home improvement retailer with approximately 475,000 orange-blooded associates and more than 2,300 stores in the US, Canada and Mexico.
in partnership with
The challenge
On 28th March 2024, Home Depot announced its acquisition of SRS Distribution for US$18.25bn. This strategic acquisition’s aim was to enable the company to better serve the complex project purchase occasion, while also establishing the company as a leading specialty trade distributor across multiple verticals. However, the sheer scale of the acquisition necessitated a financing strategy that was both cost-effective and flexible. Home Depot needed to secure funding that aligned with the uncertain regulatory approval timeline while maintaining financial discipline to ensure post-acquisition deleveraging.
Regulatory uncertainty – the acquisition was subject to regulatory review, which can take anywhere from 30 days to over a year. As such, Home Depot needed to design a financing structure that could accommodate a wide range of potential closing timelines.
Cash flow considerations – it was essential for the company to maintain sufficient liquidity and have the ability to deleverage its balance sheet within two years to ensure no impact to credit ratings.
Market conditions – Home Depot needed to access capital at a competitive cost, which meant navigating dynamic market conditions and understanding capacity constraints across funding sources in order to optimise pricing.
Industry expectations – in the retail sector, the use of commercial paper (CP) to fund large scale M&A is unconventional, subjecting Home Depot’s approach to scrutiny from credit agencies and other stakeholders.
The solution
Home Depot’s treasury team, in collaboration with banking partners, legal advisors and credit rating agencies, structured a financing solution that was fully implemented by 17th June 2024. This strategy was executed in multiple phases to accommodate regulatory developments and financial conditions.
Revolving credit facilities – Home Depot established three separate revolving credit facilities, providing access to US$14.5bn in incremental liquidity. This set-up allowed for flexibility in timing and cost-effectiveness, with favourable interest rates compared to a traditional bridge facility or other funded debt alternatives.
Initial funding – the acquisition was initially funded using CP and cash on hand. This strategic decision allowed Home Depot to raise debt quickly while also preserving balance sheet flexibility via prepayable short-term debt.
Bond offering – a US$10bn, nine-tranche senior unsecured bond offering was issued to replace a portion of the outstanding CP, securing long-term financing at competitive rates. The offering was oversubscribed by ~5x, with a weighted average coupon of 5.04%, reflecting strong demand from investors. J.P. Morgan was the lead active bookrunner.
By leveraging CP instead of a short-term bridge, Home Depot achieved an estimated US$35m in cost savings, while still maintaining flexibility to quickly pay down debt. The solution resulted in an estimated 97 basis points reduction in financing costs, equating to significant interest savings over the life of the debt.
“We are truly honoured to receive this award. I’m grateful to work alongside such a thoughtful and dedicated team at Home Depot, and to partner with bankers who genuinely understand and support our business goals.”
Isabel Janci, VP of Investor Relations and Treasurer
Best practice and innovation
Home Depot’s funding solution exemplifies industry best practice by balancing cost efficiency, financial flexibility and strategic execution. The company adeptly managed its liquidity position, ensuring funds were available as needed without excessive long-term debt exposure. Strong results from the CP and bond executions also exemplify Home Depot’s thoughtful approach to market. The ability to raise US$15bn in CP within one week is a feat rarely seen in any sector. The successful execution of this approach was enabled by Home Depot’s strong credit rating and disciplined financial management.
Additionally, Home Depot effectively navigated the rating agency review process, securing reaffirmed credit ratings. This demonstrated that alternative funding mechanisms can be viable in industries where they are not commonly used. The solution has set a precedent for other large-scale corporate acquisitions more broadly, proving that companies with strong financial fundamentals can deploy CP-backed funding strategies effectively.
Key benefits
Cost savings.
Risk mitigated.
Ultimately, Home Depot’s funding strategy not only enabled the seamless execution of a transformative acquisition but also demonstrated a forward-thinking approach to corporate finance.
Annemarie Milton
Managing Director, J.P. Morgan Global Corporate Banking
Home Depot’s funding solution for the acquisition of SRS demonstrates how the company has set itself apart as a market leading retailer of scale. Its impressive operating cash flow generation and strong credit ratings enabled HD to raise liquidity, and subsequently de-lever, at a rate few others could accomplish. This financing has proven Home Depot’s ability to pursue large-scale strategic acquisitions while still maintaining its commitment to a fortress balance sheet. The Home Depot team adeptly navigated this complex transaction, and we are grateful to have been a part of another transformational event in the company’s history.
in partnership with
The Adam Smith Awards are the industry benchmark for best practice and innovation in corporate treasury. The 2025 awards attracted 454 nominations. To find out more please visit treasurytoday.com/adam-smith-awards
Please enter the email that you signed up with below. If your email is
connected to a member account, we will send you a reset link.
This website uses cookies and asks for your personal data to enhance your browsing experience. We are committed to protecting your privacy and ensuring your data is handled in compliance with the General Data Protection Regulation (GDPR).
