) 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,
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
SUPERVALU carries a Zacks Rank #3 (Hold).
Stocks in the sector that are performing well and deserve a
Haverty Furniture Companies Inc.
), carrying a Zacks Rank #1 (Strong Buy) and
Etablissements Delhaize Fr
The Kroger Co.
) carrying a Zacks Rank #2 (Buy).
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SUPERVALU INC (SVU): Free Stock Analysis
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