Supervalu Inc.(SVU) is geared to increase its flexibility to pay the term loan due on May 2016. The company revealed that it has concluded the amendment and extension of its $1.0 billion asset-based revolving credit facility.
The Minnesota-based grocery retailer extended its revolving facility to Sep 30, 2019 from its prior maturity date of Feb 21, 2019. The amendment also added a springing maturity provision of the credit facility. Under this facility the maturity date of the revolving credit facility will be proponed to a date which is 90 days prior to the maturity of $1.5 billion secured term loan comprising 8% senior secured notes due May 2016 in case the company has any outstanding obligations under the secured term loan facility.
Extension of the maturity date has increased the flexibility of the company and has provided the company with greater flexibility to pay its secured term loan with proceeds from the revolving credit facility.
Wells Fargo & Company (WFC), U.S. Bank, The Goldman Sachs Group Inc. (GS), Credit Suisse Group AG. (CS), Morgan Stanley (MS), Barclays Plc (BCS), Rabobank and Bank of America Corporation (BAC), Merrill Lynchacted as Joint Lead Arrangers and Joint Bookrunners on the amendment.
The company ended the first quarter of fiscal 2015 with cash and cash equivalents of $90.0 million versus $83.0 million in the prior quarter. Long-term debt and capital lease obligations were $2.5 billion as of quarter-end compared with $2.7 billion as of prior quarter.
Recently, news of a data breach incident at Supervalu’s Albertson stores circulated in the media, which was closely followed by a similar incident in late July when its customer payment system was hacked. It is noted that the U.S. remains vulnerable to such credit card thefts with a flawed card payment system.Retailers like The TJX Companies Inc. (TJX), Wal-Mart Stores Inc. (WMT) and Target Corp.(TGT) are spending substantial cash to tighten security.
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