Albertsons to sell $1.25 billion two-part senior notes on Tuesday

By Paul A. Harris

Portland, Ore., Aug. 11 – Albertsons Cos., Inc. plans to price $1.25 billion of senior notes (existing ratings B2/BB-) in two tranches by means of a Tuesday drive-by trade following a mid-morning conference call with investors, according to market sources.

The Rule 144A and Regulation S deal features 5.5-year notes, which become callable after two years at par plus 50% of the coupon. Initial talk is in the mid 3% area.

The deal also includes 8.5-year notes, which become callable after three years at par plus 50% of the coupon. Initial talk is in the high 3% area.

Tranche sizes will be sized at a minimum of $500 million.

BofA Securities Inc., Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. LLC, Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Wells Fargo Securities LLC, Barclays, Deutsche Bank Securities Inc., Morgan Stanley & Co. LLC, RBC Capital Markets Corp., BMO Capital Markets Corp., MUFG, PNC Capital Markets LLC and U.S. Bancorp Investments Inc. are the joint bookrunners.

The Boise, Idaho-based grocery company plans to use the proceeds to redeem its 6 5/8% senior notes due 2024.

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