Roundy’s, Inc. (“Roundy’s”) (NYSE: RNDY), a leading grocer in the Midwest, today announced that its wholly owned subsidiary, Roundy’s Supermarkets, Inc. (the “Issuer”), intends to offer, subject to market and other customary conditions, $200 million in aggregate principal amount of senior secured second lien notes due 2020 (the “Notes”) in a private offering that is exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”). The Notes will be guaranteed, jointly and severally, by Roundy’s and certain of its existing and future domestic subsidiaries. The Notes and the related guarantees will be senior secured second lien obligations of the Issuer and the guarantors.
Roundy’s intends to use the proceeds from the offering to prepay a portion of the term loan under its first lien credit facility and to fund its previously announced purchase of 11 Chicago area Dominick’s stores from Safeway Inc. (“Safeway”) (NYSE: SWY) in a $36 million cash and lease assumption transaction and the related purchase of $10 million of net inventory. The company will also amend its first lien credit agreement to increase financial flexibility by relaxing certain covenants. The Notes offering is contingent upon the effectiveness of the amendment to the first lien credit facility. However, the portions of the amendment that provide increased financial flexibility will not become effective until closing of the Chicago stores purchase if such purchase is not consummated prior to or concurrently with closing of the Notes offering.
The Notes and the related guarantees will be offered only to “qualified institutional buyers” in reliance on the exemption from registration pursuant to Rule 144A under the Securities Act and to persons outside of the United States in compliance with Regulation S under the Securities Act. The Notes and the related guarantees have not been registered under the Securities Act, or the securities laws of any state or other jurisdiction, and may not be offered or sold in the United States without registration or an applicable exemption from the Securities Act and applicable state securities or blue sky laws and foreign securities laws.
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