A&P seeks to modify DIP credit agreement covenants to avoid default

By Caroline Salls

Pittsburgh, Sept. 13 - The Great Atlantic & Pacific Tea Co., Inc. (A&P) wants to modify some of the covenants included in its debtor-in-possession credit agreement, according to an 8-K filed Tuesday with the Securities and Exchange Commission.

Specifically, the amendment would change the measurement intervals for minimum excess availability requirements and reduce minimum cumulative EBITDA requirements.

In addition, the requirements would be measured beginning with the period ending Dec. 31, provided that those requirements will not apply if the company has filed a plan of reorganization on or before the date in question under which the lenders would be repaid in full.

If negotiations with lenders are not successful, A&P said it could be in default under the DIP credit agreement.

A&P, a Montvale, N.J.-based operator of supermarkets, filed for bankruptcy on Dec. 12, 2010 in the U.S. Bankruptcy Court for the Southern District of New York. Its Chapter 11 case number is 10-24549.

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