Messy end to merger results in Albertsons debt issuanceMessy end to merger results in Albertsons debt issuance

Albertsons Companies, Inc. is looking to reduce the substantial debt it acquired as a result of its failed merger with Kroger by offering it up to investors. 

The Boise, Idaho-based retailer said Wednesday that it intends to offer $600 million in “aggregate principal amount of new senior notes due 2033.”

Senior notes are a type of debt security. They are typically issued by companies to raise capital and come with a fixed interest rate and maturity date.

The company plans to use the money it gets from this sale, along with the cash it already has, to pay off its $600 million debt that’s due in 2026 and cover the costs that come with refinancing and issuing the notes.

The offering, which includes Albertsons Companies and subsidiaries Safeway Inc., New Albertsons L.P., Albertson’s LLC and Albertsons Safeway LLC as co-issuers, is expected to close around March 11, 2025, subject to customary closing conditions.

Albertsons’ proposed merger with Kroger was blocked last year by federal and state judges. Albertsons had previously stated that if the deal wasn’t approved, it would have to consider cost-saving measures such as cutting jobs. Since the merger was halted, Albertsons has sued Kroger for a $600 million termination fee and billions in legal fees.

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Albertsons Companies and its subsidiaries are offering notes (similar to bonds) to qualified investors within and outside the U.S. These notes are not registered with the Securities and Exchange Commission and can only be sold to specific types of investors who meet certain requirements or qualify for an exemption.