Supervalu Said to Seek Reduced Rate on $1.49 Billion Term Loan

Supervalu Inc., the third-largest U.S. grocery chain, is seeking to lower the rate on a $1.49 billion loan.

The company is proposing to pay interest on the covenant-light loan due in March 2019 at 3.5 percentage points more than the London interbank offered rate with a 1 percent minimum on the lending benchmark, down from 4 percentage points more than Libor with a 1 percent floor, said the person, who asked not to be identified because the information is private.

Lenders are offered the debt at 99.875 cents on the dollar, the person said. Goldman Sachs Group Inc. is arranging the transaction, which provides lenders with six months of 101 soft-call protection, meaning that Supervalu would have to pay a one-cent premium to reprice the debt in its first six months.

Commitments are due by 5 p.m. in New York on Jan. 29, the person said.

The $1.5 billion loan was obtained to support the Eden Prairie-Minnesota-based company’s sale of five supermarket chains to a Cerberus Capital Management LP-led investor group last year, according to data compiled by Bloomberg.

Covenant light debt doesn’t include financial maintenance requirements.

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