SuperValu settles early tenders for $372.02 million 8% notes due 2016

By Toni Weeks

San Luis Obispo, Calif., May 21 - SuperValu Inc. said it has completed settlement for the $372,018,000 of 8% senior notes due May 1, 2016 that were tendered as of midnight ET on May 15, the early tender date. Payment for the early tendered notes was made on Tuesday.

The company began the modified Dutch auction tender offer on May 3 for up to $300 million of its $1 billion of notes, and on May 16 it increased the offer cap to the amount tendered by the early deadline.

As a result, the offer was fully subscribed by the early tender deadline, and all notes tendered were accepted for payment and settlement.

The offer will expire at midnight ET on May 30. Unless SuperValu further increases the tender cap prior to the expiration time, the offer will remain fully subscribed, and no notes tendered after the early tender time will be accepted for purchase, according to a press release.

As previously noted, SuperValu also amended the offer's financing condition so that the new notes offering, proceeds of which will be used to fund the tender offer, must result in the issuance of at least $372,018,000 of notes, up from $300 million. On May 16, the company priced a $400 million issue of eight-year senior notes at par to yield 6¾%.

The clearing price for the offer for each $1,000 principal amount of notes tendered by the early date was set at $1,130, which was at the high end of the range from $1,090 to $1,130 per $1,000 principal amount.

The total payment includes $30 for each $1,000 of notes tendered by the early deadline.

The company also will pay accrued interest from the last interest payment date to but excluding the settlement date.

If any notes tendered after the early deadline are accepted, the total payment for those notes will be the total payment less the early premium.

Holders tendering notes under the offer needed to specify the minimum total payment they would be willing to receive in exchange for each $1,000 principal amount of notes. The price needed to be expressed in increments of $2.50 and within the range of the offer.

Those who tendered without specifying a price were deemed to have specified a price equal to the minimum price.

Goldman Sachs & Co. (800 828-3182 or collect 212 357-0215) is the dealer manager. Global Bondholder Services Corp. (866 873-6300 or collect 212 430-3774) is the tender agent and information agent.

SuperValu is an Eden Prairie, Minn.-based food wholesaler.

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