Albertsons whispers $500 million floaters due 2024 at Libor plus 425 bps, price of 99

By Abigail W. Adams

Portland, Me., June 5 – Albertsons Cos., Inc. whispered its $500 million offering of 5.5-year senior secured floating-rate notes due 2024 at Libor plus 425 with an offer price in the 99 range, according to a market source.

The deal is being marketed via a brief roadshow on Tuesday with pricing expected on Wednesday.

BofA Merrill Lynch is lead left on the Rule 144A for life offering. Credit Suisse Securities LLC, Goldman Sachs & Co., Morgan Stanley & Co. Inc., Barclays Capital Inc., Deutsche Bank Securities Inc., RBC Capital Markets Corp., Wells Fargo Securities LLC and MUFG are joint bookrunners.

The notes will be non-callable for 1.5 years. The first call is at 102. Holders may require the company to repurchase the notes at 101% of their principal amount upon a change of control.

The offering is in the market in connection with the company’s merger with Rite Aid Corp. If the merger is not complete by Nov. 18, 2018, the notes will be required to be redeemed at the offering price.

Proceeds, together with drawings under the company’s ABL facility, proceeds from a new ABL term loan facility and cash on hand, will be used to pay part of the merger consideration, to repay Rite Aid’s debt, to cover fees and expenses and for general corporate purposes.

Albertsons is a Boise, Idaho-based food and drug retailer with 2,318 stores in 35 states.

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