Stater Bros. sets term loan B and term loan A talk as ratings emerge

By Sara Rosenberg

New York, April 23 - Stater Bros. Markets came out with talk on its $300 million seven-year covenant-light term loan B and its $275 million five-year term loan A as ratings on the its credit facility were announced at B1/B+, according to a market source.

The B loan is talked at Libor plus 400 basis points with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, the source said.

Meanwhile, the A loan is talked at Libor plus 275 bps, subject to leveraged based pricing grid, the source continued.

The term loan A, as well as a $150 million five-year revolver, have upfront fees of 50 bps for $50 million pro rata commitments and 35 bps for $25 million pro rata commitments.

The term loan A and revolver include maximum total net leverage and minimum interest coverage covenants.

Commitments are due at 5 p.m. ET on May 6, allocations are expected late in the week of May 5 and closing is targeted for May 12, the source added.

Bank of America Merrill Lynch is the lead arranger on the deal that launched on Tuesday.

Proceeds will be used to refinance an existing senior secured term loan, 7.75% notes due 2015 and 7.375% notes due 2018.

The funding of the term loan A and the term loan B is expected to occur 30 days after the closing date in conjunction with the senior notes redemption.

Stater Bros. is a Bernardino, Calif.-based supermarket chain.

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