Albertson’s sets roadshow for $1.63 billion eight-year notes offer backing Safeway acquisition

By Paul A. Harris

Portland, Ore., Oct. 2 – Albertson’s Holdings LLC plans to start a roadshow on Friday for a $1,625,000,000 offering of eight-year second-lien senior secured notes (B2/CCC+), according to a market source.

The roadshow is scheduled to wrap up on Tuesday.

BofA Merrill Lynch, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC, Barclays and Deutsche Bank Securities Inc. are joint bookrunners for the Rule 144A and Regulation S for life offering.

U.S. Bancorp Investments Inc. and SunTrust Robinson Humphrey Inc. are the co-managers.

The notes become callable after three years at par plus 75% of the coupon and feature a three-year 40% equity clawback.

Proceeds will be used to fund the acquisition of Pleasanton, Calif.-based food and drug retailer Safeway, Inc.

Debt financing also includes a $9.45 billion credit facility.

Other funds for the transaction will come from around $1.25 billion of equity and cash on hand.

Safeway’s existing debt is expected to be repaid at closing, other than capital leases and its 5% senior notes due 2019, 3.95% notes due 2020, 4¾% senior notes due 2021, 7.45% debentures due 2027 and 7¼% debentures due 2031.

Under the agreement, Safeway is being bought for $32.50 per share in cash, and shareholders will have the right to receive pro-rata distributions of net proceeds from primarily non-core assets with an estimated value of $3.65 per share.

Albertson’s is a Boise, Idaho-based grocery company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.