SuperValu prepays $750 million of loans following Save-A-Lot sale

By Tali Rackner

Norfolk, Va., Dec. 9 – SuperValu Inc. prepaid $750 million of outstanding loans under its existing senior secured term loan credit agreement dated Jan. 31, 2014, according to an 8-K filing with the Securities and Exchange Commission.

The Dec. 5 payment is in connection with the $1.37 billion sale of the company’s Save-A-Lot business to SAL Acquisition Corp. (formerly Smith Acquisition Corp.), which was completed on the same day.

Goldman Sachs Bank USA is the administrative and collateral agent on the credit agreement.

Under the credit agreement, the company is required, within 10 days of completion of the sale, to make an additional prepayment of loans under the agreement in an amount of roughly $75 million, which represents 50% of the net cash proceeds in excess of $750 million up to an aggregate amount that would cause the company’s total secured leverage ratio, on a pro forma basis after giving effect to such prepayment, to be no higher than 1.5 times, the filing said.

In connection with the sale, SuperValu entered into an agreement with the Pension Benefit Guarantee Corp. under which, among other things, the company agreed to make certain contributions to its qualified pension plan in excess of any required minimum contributions and to repay any outstanding balance under its $1 billion asset-based revolving ABL credit facility at the time of the sale.

SuperValu is an Eden Prairie, Minn.-based supermarket operator and wholesale grocery distributor.

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