Milwaukee-based Roundy’s Inc. today announced that its wholly owned subsidiary, Roundy’s Supermarkets Inc., 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 private offering is exempt from registration under 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 Finer Foods stores in the Chicago market from Safeway Inc.
Roundy’s will acquire the Dominick’s stores for $36 million in a 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 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.