SUPERVALU successfully completed the amendment of its existing $1.5 billion senior secured term loan agreement. Goldman Sachs and Barclays acted as joint lead bookrunners and joint lead arrangers on the amendment.

On July 28, 2015, the company began exploring a potential separation of its Save-A-Lot segment and as part of that process, it started preparations to allow for a possible spin-off of Save-A-Lot into a stand-alone, publicly traded company. This amendment permits the company and its subsidiaries to undertake certain transactions to effectuate a spin-off of Save-A-Lot.

In the event a spin-off of Save-A-Lot is consummated, the amendment requires that Save-A-Lot issue a minimum of $400 million of long-term debt and that SUPERVALU’s term loan balance be reduced by a minimum of $350 million (including with the net cash proceeds of the Save-A-Lot debt issuance). In addition, SUPERVALU would be required to retain at the time of a spin-off of Save-A-Lot a certain minimum equity stake in the spun-off, publicly traded Save-A-Lot company. In accordance with the terms of the amendment, the net cash proceeds from any future monetization of such retained equity stake could be required to be used to reduce the term loan balance.

“We are pleased to have been able to work with our term loan lenders to execute this amendment,” said Executive Vice President, Chief Operating Officer and Chief Financial Officer Bruce Besanko. “The company now has the flexibility under its credit agreements to further explore the previously announced potential separation of Save-A-Lot into a stand-alone, publicly traded company.”

The amendment increases the interest rate margin above LIBOR from 3.5% to 4.5% (and up to 4.75% in the event of a downgrade of certain of the Company’s credit ratings), while the LIBOR floor remains at 1%. The amendment also increases the company’s flexibility to execute certain sale and leaseback transactions and acquisitions under the term loan agreement and modifies certain covenants and provisions set forth in the term loan agreement. The maturity date of the term loan remains March 21, 2019.