Supervalu completes offer for 7 7/8% notes, 6.95% notes, 8.35% notes

By Jennifer Chiou

New York, May 29 - Supervalu Inc. said it completed the cash tender offer for up to $975 million of three series of notes, receiving tenders from holders of:

• $231,826,000 of its $350 million of 7 7/8% notes due Aug. 1, 2009;

• $177,134,000 of the $350 million of 6.95% notes due Aug. 1, 2009 issued by Supervalu's wholly owned subsidiary, New Albertson's, Inc.; and

• $110,457,000 of New Albertson's $275 million of 8.35% notes due May 1, 2010.

The tender expired at 8 a.m. ET on May 29. The early deadline was 12:01 a.m. ET on May 14. The tender began on April 30.

The offer was originally announced at $700 million but then upsized to $975 million after the company increased its offering of senior notes to $1 billion from the original $500 million.

As first announced, the 7 7/8% notes had first priority for purchase, but with the increase in the total amount Supervalu offered to buy all the outstanding notes.

The offer was conditioned upon, among other things, the completion of the offering of the senior notes before the early tender deadline.

Supervalu said the offer was meant to provide the company with financial flexibility through refinancing.

Supervalu will pay $1,010.00 per $1,000 principal amount of 7 7/8% notes, including $30.00 for those who tendered by the early date. As already reported, the company closed on an offering of $1 billion of its 8% senior notes due 2016,

For each $1,000 principal amount, Supervalu will pay $1,008.75 for the 6.95% notes and $1,025.00 for the 8.35% notes. Those payouts also include $30.00 for those who tender by the early date.

The company said it will also pay accrued interest to the settlement date.

Innisfree M&A Inc. was the information agent (888 750-5834 or call collect 212 750-5833). U.S. Bank NA was the tender agent (800 934-6802). Credit Suisse Securities (USA) LLC (212 325-4951), Banc of America Securities LLC (888 292-0070 or call collect 980 388-9217), Citigroup Global Markets Inc. (800 558-3745) and RBS Securities Inc. (877 297-9832 or call collect 203 618-6145) were the dealer managers.

Supervalu is an Eden Prairie, Minn., grocery business engaged in retail food and supply chain services, including wholesale distribution and related logistics support services.

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