A Goldman Sachs-led arranger group has set bank meeting at 11:00 EST on a Jan. 29 to launch its refinancing for Supervalu, sources said
Goldman Sachs, Credit Suisse, Morgan Stanley, Bank of America Merrill Lynch and Barclays have underwritten the $1.5 billion term loan, sources said.
Supervalu will sell its Albertsons, Acme, Jewel-Osco, Shaw’s and Star Market stores and related Osco and Sav-On in-store pharmacies to a consortium of Cerberus Capital Management, Kimco Realty Corp., Klaff Realty LP, Lubert-Adler Partners and Schottenstein Real Estate Group in a transaction valued at $3.3 billion, while obtaining $2.4 billion of new loans to refinance its debt.
The refinancing will include a $900 million asset-based revolving credit led by Wells Fargo and the $1.5 billion term loan secured by a portion of the company’s real estate and an equity pledge of Moran Foods, LLC (the parent entity of the Save-A-Lot business). The term loan will be covenant-lite, sources said.
The entities being acquired by the consortium have obtained separate financing, which hasn’t been detailed publicly, sources said. That financing is underwritten by Citigroup, Bank of America Merrill Lynch, Credit Suisse, Morgan Stanley and Barclays.
The proceeds of these financings will be used to replace the existing $1.65 billion asset-based revolving credit facility, the existing $846 million term loan, and to call and refinance $490 million of 7.5% bonds scheduled to mature in November 2014.
Supervalu’s $846 million loan due 2018 (L+675, 1.25% LIBOR floor), which was issued in August at 97, is slated to be repaid in connection with the transaction.
The sale will consist of the acquisition by AB Acquisition of the stock of New Albertsons, a wholly owned subsidiary of Supervalu, which owns the Banners, for $100 million in cash. NAI will be sold to AB Acquisition subject to approximately $3.2 billion in debt, which will be retained by NAI. As part of the transaction, which includes 877 stores across the Banners, AB Acquisition-owned Albertson’s LLC will reunite its Albertson’s stores with the acquired NAI Albertsons stores. – Staff reports