SuperValu launches $840 million term loan B at Libor plus 350-375 bps

By Sara Rosenberg

New York, May 22 – SuperValu Inc. launched on Monday its $840 million seven-year covenant-light senior secured term loan B (Ba3/BB-) with price talk of Libor plus 350 basis points to 375 bps with a 1% Libor floor and an original issue discount of 99.5, according to a market source.

The term loan has 101 soft call protection for six months and amortization of 1% per annum, the source said.

Of the total term loan amount, $525 million will be funded and $315 million will be delayed-draw.

Goldman Sachs Bank USA, RBC Capital Markets, Barclays, Credit Suisse Securities (USA) LLC, BMO Capital Markets and Citigroup Global Markets Inc. are the bookrunners on the deal.

Co-managers include Wells Fargo Securities LLC, US Bank, Rabobank and Natixis/Peter J. Solomon.

Commitments are due at noon ET on June 1, the source added.

Proceeds will be used to refinance an existing $524 million senior secured term loan B due 2019 and to help fund the acquisition of Unified Grocers Inc.

Under the agreement, SuperValu will pay about $114 million in cash for all of Unified Grocers’ outstanding stock, plus assume and pay off Unified Grocers’ net debt of about $261 million at closing. The transaction is valued at $375 million.

SuperValu is an Eden Prairie, Minn.-based supermarket operator and wholesale grocery distributor. Unified Grocers is a retailer-owned wholesale grocery cooperative.

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