Albertsons draws down $2 billion of its $4 billion ABL revolver

By Rebecca Melvin

New York, March 18 – Albertsons Cos., Inc. has newly borrowed $2 billion under its existing secured asset-based loan facility, which provides for a $4 billion revolver, according to an 8-K filed Wednesday with the Securities and Exchange Commission.

The grocery company said that while it has seen a significant increase in sales as a result of consumer response to the Covid-19 outbreak, and it has not experienced any disruption in operating activities, it provided notice to borrowers on March 12, and moved to borrow the funds under its Nov. 16, 2018 credit agreement as a precautionary measure to increase its cash position and preserve financial flexibility in light of the uncertainty in the global markets.

The proceeds are currently being held on the company’s balance sheet, and may be used in the future for working capital and general corporate and other purposes.

As of Wednesday, the company’s net borrowing base availability was about $1.4 billion.

The interest rate for borrowing under the facility is about Libor plus 125 basis points.

Albertsons is a Boise, Idaho-based food and drug retailer.

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