Save-A-Lot launches $740 million term B at Libor plus 575-600 bps

By Sara Rosenberg

New York, Nov. 14 – Save-A-Lot launched on Monday its $740 million seven-year senior secured covenant-light term loan B (B2/B) with price talk of Libor plus 575 basis points to 600 bps with a 1% Libor floor and an original issue discount of 99, according to a market source.

The term loan B has 101 soft call protection for six months and amortization of 1% per annum, the source said.

The incremental allowance is the greater of $105 million and 50% of LTM EBITDA, plus an unlimited amount up to 3.5 times senior-lien net leverage, plus voluntary prepayments, with 50 bps MFN for six months.

Mandatory prepayments are from a 50% excess cash flow sweep with leverage-based step-downs, 100% of asset sale proceeds and 100% of debt issuance proceeds.

Commitments are due at 5 p.m. ET on Nov. 29, the source added.

The company’s $990 million credit facility also provides for a $250 million five-year ABL revolver.

Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Barclays, Deutsche Bank Securities Inc. and BMO Capital Markets Corp. are the joint lead arrangers on the deal.

Proceeds will be used to help fund the buyout of the company by Onex Corp. from Supervalu Inc. for $1,365,000,000 in cash, subject to customary closing adjustments.

Secured and total leverage is around 3.5 times.

Closing is expected during the week of Dec. 5, subject to regulatory approvals and other customary conditions.

Save-A-Lot is a hard-discount grocery retailer.

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