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A&P to cut bridge with Metro stake proceeds; to refinance with bonds, convertibles; ABL facility raised to $675 million
By Paul A. Harris and Sara Rosenberg
St. Louis, Nov. 6 - The Great Atlantic & Pacific Tea Co. Inc. (A&P) could reduce the size of its $780 million senior secured bridge loan by as much as $450 million pending the results of the planned sale of all of A&P's 11.7 million shares of Metro Inc., according to an informed source.
As a result the bridge could be downsized to about $330 million from the previously announced $780 million.
A&P plans to take out the remaining bridge with proceeds from sale of senior secured high-yield bonds or convertible debt, or a combination of the two.
Previously the company was expected to take out the bridge using only bonds.
A special stockholder meeting is planned for Thursday.
Meanwhile A&P has upsized its ABL credit facility to $675 million from $615 million.
The facility is comprised of a $547.1 million revolver, a $45 million last-out revolver advance and a term loan of up to $82.9 million.
Previously the revolver had been expected to consist of a $575 million tranche with expected pricing at Libor plus 175 basis points and an up to $40 million last-out tranche with pricing expected at Libor plus 300 bps.
Pricing on the ABL facility is expected to be consistent with what was previously disclosed, according to an 8-K document filed Tuesday with the Securities and Exchange Commission. At most, pricing can be flexed up by 25 bps.
Bank of America is leading the ABL credit facility. Banc of America Securities LLC and Lehman Brothers are leading the bridge loan.
Proceeds will be used to fund A&P's purchase of Pathmark Stores Inc. in a merger expected to close during December.
A&P is a Montvale, N.J.-based supermarket chain. Pathmark is a Carteret, N.J.-based supermarket chain.
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