SUPERVALU Offers Senior Notes - Analyst Blog
May 07 2013 - 8:00AM
Zacks
SUPERVALU Inc. (SVU) recently commenced the
sale of a portion of senior notes worth $300 million due on May 1,
2016. The senior notes carry an interest rate of 8.00% and will be
sold according to a modified “Dutch Auction” tender offer. The
procedure is expected to close on May 30, 2013. As of May 2, 2013,
the company had $1.0 billion aggregate principal amount of
outstanding notes.
The senior note program will increase the company’s liquidity.
Although SUPERVALU’s cash and cash equivalents as of Feb 23, 2013
were $72.0 million, down from $155.0 million as of Dec 1, 2012, its
long-term debt and capital lease obligations fell drastically to
$2.8 billion as of Feb 23, 2013 from $6.2 billion as of Dec 1,
2012.
SUPERVALU has been adversely affected by the slow economic recovery
and low disposable income of U.S. consumers, which resulted in
cautious spending in the quarter. The company streamlined some of
its non-performing supermarkets in order to optimize resources and
improve business.
On Mar 18, 2013, as a part of its broad-based strategic
alternatives, SUPERVALU sold Albertson's, Jewel-Osco, Acme, Shaw's
and Star Market chains, comprising a total of 877 stores, to equity
firm Cerberus Capital Management LP, for $3.3 billion. The company
intended to streamline its operations in order to focus on
Save-A-Lot discount stores, as well as its smaller regional chains
– Cub, Farm Fresh, Shoppers, Shop 'n Save and Hornbacher's.
SUPERVALU carries a Zacks Rank #3 (Hold).
Stocks in the sector that are performing well and deserve a
mention include Haverty Furniture Companies Inc.
(HVT), carrying a Zacks Rank #1 (Strong Buy) and
Etablissements Delhaize Fr (DEG) and The
Kroger Co. (KR) carrying a Zacks Rank #2 (Buy).
DELHAIZE-LE (DEG): Free Stock Analysis Report
HAVERTY FURNIT (HVT): Free Stock Analysis Report
KROGER CO (KR): Free Stock Analysis Report
SUPERVALU INC (SVU): Free Stock Analysis Report
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