Grocery Outlet shifts funds between term loans, flexes pricing higher

By Sara Rosenberg

New York, Oct. 15 – Grocery Outlet Inc. (GOBP Holdings Inc.) increased its seven-year first-lien term loan B to $450 million from $440 million and decreased its eight-year second-lien term loan to $200 million from $210 million, according to a market source.

In addition, pricing on the first-lien term loan was raised to Libor plus 475 basis points from talk of Libor plus 400 bps to 425 bps, and pricing on the second-lien term loan was lifted to Libor plus 825 bps from talk of Libor plus 750 bps to 775 bps, the source said.

Furthermore, the original issue discount on the second-lien term loan widened to 98˝ from 99 and the 101 soft call protection on the first-lien term loan was extended to one year from six months.

Both term loans still has a 1% Libor floor, the first-lien term loan still has an original issue discount of 99, and the second-lien term loan still has hard call protection of 102 in year one and 101 in year two.

The company’s $725 million senior credit facility also provides for a $75 million revolver.

Recommitments were due at 2 p.m. ET on Wednesday, the source added.

Morgan Stanley Senior Funding Inc., Deutsche Bank Securities Inc. and Jefferies Finance LLC are the bookrunners on the deal.

Proceeds will be used to help fund the buyout of the company by Hellman & Friedman LLC from Berkshire Partners LLC.

Grocery Outlet is an Emeryville, Calif.-based grocery store operator.

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