Albertsons Companies, Inc. Announces Proposed Senior Notes Offering

Rhea-AI Summary

Albertsons Companies (NYSE: ACI) intends to offer $1,250 million in new senior notes due 2026 and 2029. The proceeds, alongside $50 million in cash, will be used to redeem existing 6.625% Senior Notes due 2024 and cover related expenses. The redemption is contingent upon successfully completing the offering. The new notes will be offered to qualified institutional buyers under Rule 144A and international investors under Regulation S. The notes are unregistered and cannot be sold in the U.S. without registration or an exemption.

Positive

• Proceeds from the new notes will fund the redemption of higher-interest existing notes, potentially reducing interest expenses.

Negative

• The company is initiating a large debt offering, which may increase leverage and financial risk.

BOISE, ID, Aug. 11, 2020 (GLOBE NEWSWIRE) -- Albertsons Companies, Inc. (NYSE: ACI) (the "Company") today announced its intention to offer $1,250 million in aggregate principal amount of new senior notes due 2026 and new senior notes due 2029 (collectively, the "New Notes"). The Company and its subsidiaries, Safeway Inc., New Albertsons L.P. and Albertson's LLC, will be co-issuers of the New Notes.

The Company intends to use the net proceeds from the offering, together with approximately $50 million of cash on hand, to (i) fund the redemption (the "Redemption") of its outstanding 6.625% Senior Notes due 2024 (the "Existing 2024 Notes") and (ii) pay fees and expenses related to the Redemption and the issuance of the New Notes.

Pursuant to the terms of the indenture governing the Existing 2024 Notes, the Company will issue a conditional notice of redemption to redeem the outstanding Existing 2024 Notes. The Redemption will be conditional upon successful completion of the offering of the New Notes.

The New Notes will be offered in the United States to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), and to persons outside the United States in compliance with Regulation S under the Securities Act. The New Notes have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the New Notes in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

About Albertsons Companies

Albertsons Companies is a leading food and drug retailer in the United States. As of June 20, 2020, the Company operated 2,252 retail food and drug stores with 1,726 pharmacies, 402 associated fuel centers, 22 dedicated distribution centers and 20 manufacturing facilities. The Company operates stores across 34 states and the District of Columbia under 20 well-known banners including Albertsons, Safeway, Vons, Jewel-Osco, Shaw's, Acme, Tom Thumb, Randalls, United Supermarkets, Pavilions, Star Market, Haggen and Carrs. The Company is committed to helping people across the country live better lives by making a meaningful difference, neighborhood by neighborhood. In 2019 alone, along with the Albertsons Companies Foundation, the Company gave $225 million in food and financial support. In 2020, the Company made a $53 million to community hunger relief efforts and a $5 million commitment to organizations supporting social justice. These efforts have helped millions of people in the areas of hunger relief, education, cancer research and treatment, social justice and programs for people with disabilities and veterans' outreach.

Important Notice Regarding Forward-Looking Statements

This press release contains certain forward-looking statements. Statements that are not historical facts, including statements regarding the Company’s expectations, perspectives and projected financial performance, are forward looking statements. The words "expect," "believe," "estimate," "intend," "plan" and similar expressions, when related to the Company and its subsidiaries, indicate forward-looking statements. The forward-looking statements are based on the Company's current expectations and involve risks and uncertainties, including, but not limited to, risks and uncertainties regarding our current expectations and beliefs as to our ability to consummate the offering of New Notes, the intended use of proceeds thereof, other pending transactions, and other future events. These risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements include those related to the COVID-19 pandemic, about which there are still many unknowns, including the duration of the pandemic and the extent of its impact. The Company cautions that actual results could differ materially from the expectations described in the forward-looking statements. The Company also cautions that undue reliance should not be placed on any of the forward-looking statements, which speak only as of the date of this release. The Company undertakes no responsibility to update any of these forward-looking statements to reflect events or circumstances after the date of this report or to reflect actual outcomes. Information about certain potential factors that could affect our business and financial results and cause actual results to differ materially from those expressed or implied in any forward-looking statements are included under the captions "Risk Factors" and "Management’s Discussion and Analysis of Financial Condition and Results of Operations," in our Annual Report on Form 10-K for the fiscal year ended February 29, 2020 and our Quarterly Report on Form 10-Q for the quarterly period ended June 20, 2020, which are on file with the U.S. Securities and Exchange Commission (the "SEC"), and may be contained in reports subsequently filed with the SEC and available at the SEC’s website at www.sec.gov.

Melissa Plaisance
Albertsons Companies
925-226-5115
melissa.plaisance@albertsons.com

FAQ

What is Albertsons Companies planning with the new senior notes due 2026 and 2029?

Albertsons Companies plans to offer $1,250 million in new senior notes to redeem existing 6.625% Senior Notes due 2024.

How much cash is Albertsons using alongside the new notes offering?

Albertsons intends to use approximately $50 million of cash on hand along with the proceeds from the new notes.

What is the purpose of the redemption of existing 2024 notes?

The redemption aims to lower interest expenses by replacing higher-rate notes with the new notes.

Who will be able to purchase the new senior notes?

The new senior notes will be offered to qualified institutional buyers in the U.S. and to investors outside the U.S.

Why are the new notes considered unregistered?

The new notes have not been registered under the Securities Act and cannot be sold in the U.S. without registration or an exemption.