Village Super Market inks credit facility for up to $150.5 million

By Rebecca Melvin

New York, May 13 – Village Super Market Inc. entered into a credit agreement with Wells Fargo Bank, NA on May 6 that replaces its prior agreement with the lender and which provides for a maximum of $150.5 million in loans, which were drawn in full, according to an 8-K filing with the Securities and Exchange Commission.

The unsecured five-year revolving line of credit provides for borrowing of up to $125 million. Interest charged on these borrowings are at a rate of Libor plus 110 basis points. It matures May 6, 2025.

The $25.5 million unsecured seven-year term loan was executed on Tuesday and bears interest at Libor plus 135 bps. It matures May 4, 2027.

Village also executed an interest rate swap for a notional amount equal to the term loan with a rate fixed at Libor plus 41 bps through May 4, 2027, resulting on an effective interest rate on the term loan of 176 bps.

The facility also provides that up to $50 million of the revolver may be converted to a term loan, which reduces the line of credit by converting about $50 million to a loan that will bear interest at Libor plus 150 bps for a 15-year amortization. The converted term loan is subject to customary closings conditions. Additionally Village Super Market executed a forward interest rate swap, effective Aug. 3, for a notional amount of $50 million that fixes the base Libor rate at 69 bps per year for 15 years, resulting in a fixed effective interest rate of 219 bps on the converted term loan.

The credit facility also provides for up to $25 million of letters of credit, and contains covenants that, among other conditions, require a minimum tangible net worth, a minimum fixed charge coverage ratio and a maximum adjusted debt to EBITDAR ratio.

The purpose of the facility is to finance general corporate purposes, working capital requirements and the company’s acquisition of certain Fairway Group Holdings Corp. assets.

Village Super Market’s prior credit agreement with Wells Fargo originated Nov. 9, 2017.

The supermarket operator is based in Springfield, N.J.

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