Albertsons enters into $4 billion ABL revolver at Libor plus 125 bps

By Sarah Lizee

Olympia, Wash., Nov. 16 – Albertsons Cos., Inc. amended and restated on Friday the agreement governing its existing secured asset-based loan facility, providing for a $4 billion revolving credit facility, according to an 8-K filing with the Securities and Exchange Commission.

The ABL revolver is subject to a borrowing base and may be increased by up to $1.5 billion.

The maturity date of the ABL revolver is Nov. 16, 2023.

Borrowings bear interest at Libor plus an applicable margin. The margin will be 125 basis points if daily average excess availability during the most recently ended fiscal quarter is greater than or equal to 66% of the total commitments, 150 bps if its less than 66% but greater than or equal to 20%, or 175 bps if its less than 20%.

Interest is initially Libor plus 125 bps.

The commitment fee is 25 bps per annum if average daily excess availability amount during the most recently ended fiscal quarter is less than 50% of the total commitments and 37.5 bps per annum if its greater than or equal to 50%.

The ABL revolver requires that if excess availability is less than 10% of the lesser of the total commitments and the then-current borrowing base at any time or $250 million at any time or an event of default is continuing, Albertsons and its subsidiaries must maintain a fixed-charge coverage ratio of 1 to 1 from the date such triggering event occurs until such event of default is cured or waived and/or the 30th day that all such triggers under the clause no longer exist.

Proceeds from the ABL revolver were used along with cash and proceeds from the company’s new $2 billion term loan B-7 to refinance its existing term loan B-4.

Bank of America, NA, Wells Fargo Bank, NA, Bank of Montreal, Barclays Bank plc, Citibank, NA, Credit Suisse Loan Funding LLC, Deutsche Bank Securities Inc., Fifth Third Bank, Goldman Sachs Bank USA, Morgan Stanley Senior Funding, Inc., MUFG Union Bank, NA, PNC Capital Markets LLC, RBC Capital Markets, SunTrust Robinson Humphrey, Inc., SunTrust Bank, TD Bank, NA and U.S. Bank NA are joint lead arrangers, joint bookrunners and co-syndication agents. Bank of America is the administrative agent.

Albertsons is a Boise, Idaho-based food and drug retailer.

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