A&P cuts term loan to $270 million, sets spread at Libor plus 900 bps

By Sara Rosenberg

New York, Feb. 13 - Great Atlantic & Pacific Tea Co. Inc. (A&P) downsized its term loan to $270 million from $350 million and set pricing at Libor plus 900 basis points with a 2% Libor floor and an original issue discount of 96, according to a market source.

The loan is non-callable for two years, then at 102½ in year three, the source said.

Initial talk on the loan had been Libor plus 700 bps with a 1.25% Libor floor and an original issue discount of 98, and there had been call protection of 102 in year one and 101 in year two.

Recently, though, talk had been moved to the 12% to 13% area, including coupon, Libor floor and original issue discount, the source remarked.

In addition, the company downsized its ABL revolver to $375 million from $400 million, the source added.

J.P. Morgan Securities LLC and Credit Suisse Securities (USA) LLC are the lead banks on the now $645 million exit facility, down from $750 million.

Proceeds will be used to repay the company's existing debtor-in-possession facility, to pay Chapter 11 emergence costs and for general corporate purposes.

A&P is a Montvale, N.J.-based operator of supermarkets. The company filed for bankruptcy on Dec. 12, 2010. Its Chapter 11 case number is 10-25459.

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