Dallas, Texas 01/28/2014 (FINANCIALSTRENDS) – The $1.58 billion market capped SUPERVALU INC. (NYSE:SVU) has accumulated close to $213 million from its tailing 12 months operations as a grocery store in U.S. In the same period, it had accounted for total sales of $17 billion. In view of the growing indebtedness, the Minnesota based grocery chain which is ranked 3rd among its peers in U.S, has been in negotiations with its creditors with respect to reducing its interest obligations.
On 22nd January trade magazines disclosed that the grocery store chain has proposed to pay an interest of 3.5 percent more than the prevailing London interbank rates on its light loans worth $1.49 billion which are due on March 2019. This new offer by struggling firm compares well against its current commitment to pay 4 percent on the London interbank rates. These rates are the upper limit and the lower bench mark remains to be a minimum of 1 percent interest to be paid over and above the prevailing London interbank rates. The details of the negotiations are yet to be made officially available to public by the concerned parties and hence these reports continue to be unascertained.
As per these reports, the prospective lenders are being offered the option to buy into the debt at the rate of $0.99875 per every one dollar lent to SUPERVALU INC. (NYSE:SVU) and will be indemnified by a six months soft call option. This means that the grocery store will pay a one percent premium on the loans on offer in the event of renegotiating its debt in the first six months of its issue. The negotiations being facilitated by the good offices of are nearing conclusion as per reliable sources and are expected to be signed off formally before 29th January. On 27th January trading the stock price had settled at $6.09.