Supervalu said Friday it has completed the re-pricing, amendment and extension of its $1 billion asset-based revolving credit facility
The company said the amendment reduces the facility’s interest rates to LIBOR (London Inter-Bank Offered Rate, the average interest rate estimated by leading banks that would be charged if borrowing from other banks) plus 1.5% to 2% and prime plus 0.5% to 1%, depending on utilization. It also eliminates the springing maturity provision that would have accelerated the revolving credit facility’s maturity to 90 days prior to May 1, 2016, if more than $250 million of the company’s 8% senior notes remained outstanding on that date.
The springing maturity provision has been replaced by a springing reserve provision that calls for a reserve to be placed against availability under the facility in the amount of any outstanding material indebtedness due within 30 days of the date the reserve is established, Supervalu said.
The amendment is secured by Supervalu’s inventory, credit card and certain other receivables and certain other assets.
Supervalu said other changes include the following:
• Expanding the company’s ability to increase its $1.5 billion senior secured term loan facility, subject to a secured leverage test, by up to $500 million, compared with $250 million previously, subject to identifying term loan lenders or other institutional lenders willing to provide the additional loans and the satisfaction of certain terms and conditions.
• Modifying covenants to give Supervalu additional strategic and operational flexibility and includes certain other non-material changes.
• Extending the maturity date of the revolving credit facility by 11 months to February 2019.
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