NEW YORK Jan 29 SuperValu set pricing on the $1.5 billion term loan backing its $3.3 billion deal to sell five of its supermarket chains to an investor group led by Cerberus Capital Management LP, sources told Thomson Reuters LPC.
The supermarket operator set the interest rate it will pay on the six-year covenant-lite loan at a bank meeting earlier today. The rate will be 575bp over Libor with a 1.25 percent Libor floor and will be sold at a discount of 98.5 cents on the dollar.
On January 10, SuperValu announced the sale of its Albertsons, Acme, Jewel-Osco, Shaw's and Star Market stores and related Osco and Sav-on in-store pharmacies to a Cerberus-led consortium.
Goldman Sachs, Credit Suisse, Morgan Stanley, Bank of America Merrill Lynch, and Barclays are providing the term loan.
The loan will benefit from 101 soft call protection for one year and will be secured by SuperValu real estate assets and an equity pledge from Moran Foods LLC. Moran is the parent entity for the Save-A-Lot businesses.
The commitment deadline and the allocation of the loan are expected the week of February 11.
A new $900 million asset-based revolving credit facility led by Wells Fargo rounds out the refinancing loan.
The new $2.4 billion financing package will replace SuperValu's existing $1.65 billion revolver and $846 million term loan. The package will also refinance SuperValu's $490 million 7.5 percent bonds due November 2014.