Citigroup, Bank of America Merrill Lynch, Credit Suisse and Morgan Stanley this afternoon launched a repricing forAlbertson’s that would also extend the maturity of $700 million of the supermarket operator’s $1.15 billion TLB by approximately three years, according to sources.
The proposed transaction is split between a $450 million tranche that would have the same March 21, 2016 maturity as the $1.15 billion term loan that was syndicated in February and $700 million, six-year tranche.
The three-year tranche is talked at L+350, with a 1% LIBOR floor and a par offer price, while guidance on the six-year loan is L+375, with a 1% LIBOR floor, offered at par.
At the proposed guidance, the three-year loan would yield about 4.58% to maturity, while the six-year loan would yield 4.84%.
By comparison, the existing TLB is priced at L+450, with a 1.25% LIBOR floor. It was issued at 99.5 in late February.
The existing loan included six months of 101 soft-call protection and lenders are poised to be repaid at 101, sources said, noting that the issuer is offering to refresh the 101 soft-call protection on the three-year tranche for six months and is extending one year of 101 soft-call protection to lenders to the six-year loan.
Commitments are due on Wednesday, May 1.
Like the existing term loan, the proposed transaction would be covenant-lite. As the issuer is carving out a longer-dated term loan out of the originally three-year deal, sources note that prepayments would be made on a ratable basis, with the exception of proceeds from asset sales, which would first be applied to the term loan due 2016.
Citigroup, Bank of America Merrill Lynch, Credit Suisse, Morgan Stanley and Barclays in February syndicated the existing $1.15 billion TLB, proceeds of which backed Cerberus’ acquisition of Albertson’s from Supervalu.
Standard & Poor’s has assigned a B rating to the issuer. The existing term loan is rated BB-, with a 1 recovery rating. – Kerry Kantin