SuperValu firms $840 million term loan B at Libor plus 350 bps

By Sara Rosenberg

New York, June 2 – SuperValu Inc. set pricing on its $840 million seven-year covenant-light senior secured term loan B (Ba3/BB-/BB) at Libor plus 350 basis points, the low end of the Libor plus 350 bps to 375 bps talk, according to a market source.

Also, the original issue discount on the term loan was tightened to 99.75 from 99.5, the MFN sunset was removed and a springing maturity was added to 91 days prior to the maturity date of each of the company’s 2021 and 2022 notes to the extent those notes are not refinanced or repaid, the source said.

The term loan still has a 1% Libor floor, 101 soft call protection for six months and amortization of 1% per annum.

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

There is a ticking fee of half the margin from days 31 to 60 and the full margin thereafter.

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.

Recommitments were scheduled to be due at noon ET on Friday, 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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