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A&P tender offer will result in new high-yield bond issue
By Paul A. Harris
St. Louis, Mo., Nov. 20 - A tender offer announced Monday by The Great Atlantic & Pacific Tea Co., Inc. for its 7.7% notes due Jan. 15, 2004 will result in new high yield issuance, according to A&P vice president of treasury services William Moss.
"We are basically trying to extend the capitalization of the company by issuing new debt, and calling in the '04s," Moss told Prospect News on Tuesday.
The company is offering to pay holders of its $200 million of 7.7% notes due 2004 $1,045.00 plus accrued and unpaid interest on each $1,000 principal, according to a press release issued Monday.
The purchase price includes a consent payment of $30.00 for each $1,000 principal of tendered notes that will be paid only for notes tendered prior to the consent date of 5:00 p.m. ET on Dec. 3, 2001, unless extended, the press release added.
Lehman Brothers is acting as the dealer manager and solicitation agent for the tender offer and consent solicitation, the release stated.
Moss told Prospect News that timing on any new high yield bonds would not emerge prior to the Dec. 3 expiration of the tender offer. He declined to speculate as to whether such issuance could come before year's end.
On Nov. 14 A&P announced "a program to improve operating results by disposing of underperforming assets," by closing 39 stores. The majority of those closures are scheduled to take place before Feb. 23, 2002.
Moss told Prospect News that the closures involve exclusively grocery stores, at locations nationwide.
A&P, which is headquartered in Montvale, N.J., operates 743 stores in 15 states, the District of Columbia and Ontario, Canada under trade names including A&P, Waldbaum's, Food Emporium, Super Foodmart, Super Fresh, Farmer Jack, Kohl's, Sav-A-Center, Dominion, The Barn Markets, Food Basics and Ultra Food & Drug, according to Monday's press release.
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