Albertsons launches $1.2 billion term loan at Libor plus 350 bps

By Sara Rosenberg

New York, April 18 – Albertsons Cos. Inc. launched on Wednesday its $1.2 billion five-year asset-based last-out term loan (Ba2) with price talk of Libor plus 350 basis points with a 0% 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 a ticking fee of half the margin from days 46 to 75, the full margin from days 76 to 105 and the full margin plus Libor thereafter, the source said.

Also, the term loan has a minimum fixed charge coverage ratio covenant of 1 time, tested when excess availability at any time is less than 10% of the loan cap, which has a $250 million floor.

Bank of America Merrill Lynch, Credit Suisse Securities (USA) LLC, Goldman Sachs Bank USA, Morgan Stanley Senior Funding Inc., Barclays, Deutsche Bank Securities Inc., RBC Capital Markets, Wells Fargo Securities LLC and MUFG are the joint lead arrangers on the deal.

Commitments are due at noon ET on May 2, the source added.

Proceeds will be used to refinance existing debt at Rite Aid Corp., and if applicable, fund the cash portion of the Rite Aid merger.

Albertsons is a Boise, Idaho-based food and drug retailer. Rite Aid is a Camp Hill, Pa., national drugstore chain.

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