A&P plans $800 million bonds, $600 million ABL revolver for Pathmark buy

By Sara Rosenberg

New York, March 5 - The Great Atlantic & Pacific Tea Co., Inc. (A&P) is planning to issue about $800 million of high-yield senior secured bonds and get an about $600 million ABL revolving credit facility to help fund its purchase of Pathmark Stores Inc., a company spokesman told Prospect News on Monday.

Bank of America and Lehman Brothers are the lead banks on the bond offering, and Bank of America is the lead bank on the ABL revolver.

The currently contemplated capital structure is dependant on market conditions, the spokesman added.

A&P is buying Pathmark for $1.3 billion in cash, stock and debt assumption or retirement.

All of Pathmark's bonds will be refinanced through a tender and A&P will assume about $170 million of Pathmark capital leases.

Pathmark shareholders will receive $9.00 in cash and 0.12963 shares of A&P stock for each Pathmark share. A portion of the cash merger consideration will be provided by the sale by A&P of a portion of its shares in Metro, Inc. or, if needed, A&P capital stock, totaling $190 million of net cash proceeds.

The transaction is expected to be completed during the second half of A&P's fiscal 2007 year, subject to completion of shareholder and regulatory approvals, as well as other customary closing conditions.

A&P is a Montvale, N.J.-based supermarket chain. Pathmark is a Carteret, N.J.-based supermarket chain.

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