By Paul A. Harris
St. Louis, April 30 - Supervalu Inc. doubled the size of its note offering to $1 billion and priced the new issue of 8% seven-year notes (Ba3/B+/) at 97.00 to yield 8.58% on Thursday, according to an informed source.
The quick-to-market issue, which was upsized from $500 million, priced toward the tight end of the 8½% to 8¾% price talk.
It played to a big order book, which was several times oversubscribed, according to the source, who spotted the notes in the aftermarket at 98¼ bid, 98½ offered.
"The deal was a blowout," the source commented.
Although there was a lot of reverse inquiry, it was not a pre-sold deal, the source specified, adding that the Supervalu transaction was syndicated on Thursday.
Credit Suisse, Banc of America Securities LLC, Citigroup Global Markets Inc. and RBS Securities Inc. were joint bookrunners for the Securities and Exchange Commission-registered notes.
Co-managers were J.P. Morgan Securities Inc., Morgan Stanley & Co. Inc., UBS Investment Bank, U.S. Bancorp Investments, Inc. and Williams Capital Group, LP
Proceeds will be used to fund all or a portion of the purchase price of the Supervalu 2009 notes, the Albertson's 2009 notes and the Albertson's 2010 notes tendered in the $700 million tender offer begun on April 30. Proceeds will also be used for general corporate purposes, including debt repayment, whether at maturity, through open market purchases, privately negotiated transactions or otherwise.
Supervalu is an Eden Prairie, Minn., grocery business engaged in retail food and supply chain services, including wholesale distribution and related logistics support services.
| Issuer: | Supervalu Inc.
|
| Face amount: | $1 billion, increased from $500 million
|
| Proceeds: | $970 million
|
| Maturity: | May 1, 2016
|
| Security description: | Senior notes
|
| Bookrunners: | Credit Suisse, Banc of America Securities LLC, Citigroup Global Markets Inc., RBS Securities Inc.
|
| Co-managers: | J.P. Morgan Securities Inc., Morgan Stanley & Co. Inc., UBS Investment Bank, U.S. Bancorp Investments, Inc., Williams Capital Group, LP
|
| Coupon: | 8%
|
| Price: | 97.00
|
| Yield: | 8.58%
|
| Spread: | 587 bps
|
| Call protection: | Non-callable, make-whole provision at Treasuries plus 50 bps
|
| Equity clawback: | Until May 1, 2012 for 35% at 108.0
|
| Trade date: | April 30
|
| Settlement date: | May 7
|
| Ratings: | Moody's: Ba3
|
| Standard & Poor's: B+
|
| Distribution: | SEC registered
|
| Price talk: | 8½% to 8¾%
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
