Albertsons driving by with $500 million tap of 3½% notes due 2029; initial talk 98.5-99

By Paul A. Harris

Portland, Ore., Dec. 2 – Albertsons Cos., Inc. plans to price a $500 million add-on to the Albertsons Cos., Inc., Safeway Inc., New Albertsons LP and Albertson's LLC 3½% senior notes due March 15, 2029 (existing ratings B1/BB-) in a Wednesday drive-by trailing a mid-morning conference call with investors, according to market sources.

Initial talk has the Rule 144A and Regulation S for life notes pricing at 98.5 to 99, a trader said.

BofA Securities Inc., Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. LLC, Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Wells Fargo Securities LLC, Barclays, Deutsche Bank Securities Inc., Morgan Stanley & Co. LLC, RBC Capital Markets LLC, BMO Capital Markets Corp., MUFG, PNC Capital Markets LLC, TD Securities (USA) LLC and U.S. Bancorp Investments Inc. are the joint bookrunners.

The notes become callable after Sept. 15, 2023 at 101.75. They feature a 40% equity clawback at 103.5 during the non-call period and a 101% poison put.

The Boise, Idaho-based grocery company plans to use the proceeds, together with approximately $224 million of cash on hand, to partially redeem $700 million of its outstanding notes due in 2025.

The original $750 million issue priced in August 2020.

The add-on notes will immediately become fungible with the original notes.

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