Albertsons plans to sell $500 million notes in Thursday drive-by; initial talk in high 4% area

By Paul A. Harris

Portland, Ore., Nov. 7 – Albertsons plans to price a $500 million offering of senior notes due January 2027 (existing ratings B3/BB-) in a Thursday drive-by, trailing a late-morning conference call with investors, market sources say.

Initial guidance has the notes coming to yield in the high 4% area, according to a bond trader.

BofA Securities Inc., Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. LLC, Citigroup Global Markets Inc., Morgan Stanley & Co. LLC, Barclays, Deutsche Bank Securities Inc., RBC Capital Markets LLC, Wells Fargo Securities LLC and MUFG are the joint bookrunners.

PNC Capital Markets LLC, SunTrust Robinson Humphrey Inc. and U.S. Bancorp Investments Inc. are the co-managers.

The Rule 144A and Regulation S for life notes become callable after three years at par plus 75% of the coupon. They feature a three-year 40% equity clawback at par plus the coupon and a 101% poison put.

The Boise, Idaho-based grocery company plans to use the proceeds to repay approximately $495 million of its term loan B-7.

The issuing entities will be Albertsons Cos., Inc., Safeway Inc., New Albertsons LP and Albertson’s LLC.

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