New Issue: Albertson's $1 billion mandatory convertible yields 7.25%, up 25%

Nashville, May 4 - Albertson's Inc. sold $1 billion of three-year non-callable mandatory convertibles at par of 25 to yield 7.25% with a 25% initial conversion premium via sole bookrunner Banc of America Securities.

The issue sold at the aggressive end of price talk for a dividend at 7.25% to 7.75% and initial conversion premium between 20% and 25%.

The Boise, Idaho-based grocery chain intends to use proceeds to repay commercial paper borrowings in connection with the $2.5 billion acquisition of JS USA Holdings Inc., which operates under the banners of Shaw's and Star Markets, from J Sainsbury plc.

Terms of the deal are:

Issuer:	Albertson's Inc.
Issue:	Hybrid Income Term Security Units
Bookrunner:	Banc of America Securities
Joint lead managers:	Credit Suisse First Boston and Merrill Lynch & Co.
Amount:	$1 billion
Greenshoe:	$150 million
Maturity:	May 2007
Coupon:	7.25%
Price:	Par, $25
Yield:	7.25%
Conversion premium:	25%
Conversion price:	$28.825
Conversion ratio:	0.8673
Call:	Non-callable
Price talk:	7.25-7.75%, up 20-25%
Pricing date:	May 3, after the close
Settlement date:	May 7
Distribution:	Registered

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