Supervalu closes on $1 billion of financing intended for tender for three series of notes

By Jennifer Chiou

New York, May 7 - Supervalu Inc. said it plans to use the proceeds from the closing of an offering of $1 billion of its 8% senior notes due 2016 to fund its previously announced cash tender offer for up to $975 million of the following:

• Its $350 million of 7 7/8% notes due Aug. 1, 2009;

• The $350 million of 6.95% notes due Aug. 1, 2009 issued by Supervalu's wholly owned subsidiary, New Albertson's, Inc.; and

• New Albertson's $275 million of 8.35% notes due May 1, 2010.

The tender began on April 30.

The offer was originally announced at $700 million but then upsized to $975 million after the company increased its offering of senior notes to $1 billion from the original $500 million.

As first announced, the 7 7/8% notes had first priority for purchase, but with the increase in the total amount Supervalu is now offering to buy all the outstanding notes.

The offer is conditioned upon, among other things, the completion of the offering of the senior notes before 12:01 a.m. ET on May 14, which is the early tender deadline.

The tender will expire at 8 a.m. ET on May 29.

Supervalu said the offer is meant to provide the company with financial flexibility through refinancing.

Supervalu will pay $1,010.00 per $1,000 principal amount of 7 7/8% notes, including $30.00 for those who tender by the early date.

For each $1,000 principal amount, Supervalu will pay $1,008.75 for the 6.95% notes and $1,025.00 for the 8.35% notes. Those payouts also include $30.00 for those who tender by the early date.

The company said it will also pay accrued interest to the settlement date.

Innisfree M&A Inc. is the information agent (888 750-5834 or call collect 212 750-5833). U.S. Bank NA is the tender agent (800 934-6802). Credit Suisse Securities (USA) LLC (212 325-4951), Banc of America Securities LLC (888 292-0070 or call collect 980 388-9217), Citigroup Global Markets Inc. (800 558-3745) and RBS Securities Inc. (877 297-9832 or call collect 203 618-6145) are the dealer managers.

Supervalu is an Eden Prairie, Minn., grocery business engaged in retail food and supply chain services, including wholesale distribution and related logistics support services.

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