SUPERVALU INC. (NYSE:SVU) Credit Agreement Gets Moody’s BuyIn


Dallas, Texas 02/06/2014 (FINANCIALSTRENDS) – The $1.43 billion market capped grocery chain operator SUPERVALU INC. (NYSE:SVU) is   sitting pretty  on the back of Moody’s Investors Service, Inc. terming the loan amendment deal that the grocery chain has struck as credit positive. The assessment did not warrant a change in the existing rating recommendation of the stock by Moody’s. The above assessment was shared by Moody’s Investors Service, Inc. with its clients in its credit research report dated 3rd February.

The report was necessitated when the Eden Prairie based grocery retailer announced on 31st January that it had successfully managed to strike a refinancing deal with its existing creditors on its “senior secured term loan agreement”. As part of the reworked terms, the interest rate on the loan outstanding comes down to 3.5 percent, while the London interbank lending rates based interest bench mark will remain 1 percent at the lower end. The new terms also dispose off with the earlier mandatory “springing maturity provision”. This eliminates the chance of the loan maturing before hand  in 2016, in the event of senior notes worth more than $250 million remain outstanding as of the cut off date in May 2016. Under the reworked terms, the maturity dates of the loan will remain March 2019.  At the time of restatement of the agreement, a total of $628 million senior notes with a 8% interest liability remains outstanding. The outstanding has come down substantially from November 2013, when total debts of $1491 million were on the books of the grocery store.

Moody’s vote of confidence in its debt situation means that SUPERVALU INC. (NYSE:SVU) which operates close to  1,524 company owned stores and supports an additional 1,800 independent retail has reported revenues to the tune of $17 billion over the trailing 12 months and has accumulated net loss of $213 million in the same period.