Albertsons sets price for $600 million senior notes due 2033

BOISE, Idaho - Albertsons Companies , Inc. (NYSE: NYSE:ACI), a prominent U.S. food and drug retailer with a market capitalization of $11.9 billion, has announced the pricing of a $600 million private offering of 6.250% senior notes due in 2033. According to InvestingPro analysis, the company maintains a GOOD financial health score, though current market prices suggest the stock is slightly overvalued. The notes will be co-issued by Albertsons and its subsidiaries, including Safeway Inc., New Albertsons L.P., Albertson’s LLC, and Albertsons Safeway LLC. The offering is anticipated to close around March 11, 2025, subject to customary closing conditions.

The net proceeds from the offering, along with available cash, are intended to fully redeem the company’s existing $600 million 7.500% senior notes due in 2026, which are set to mature on March 15, 2026. This refinancing strategy also includes covering the fees and expenses associated with the transaction. With total debt of $14.2 billion and a current ratio of 0.93, InvestingPro data reveals the company’s careful debt management approach.

The notes were offered within the U.S. to qualified institutional buyers in accordance with Rule 144A, and outside the U.S. in compliance with Regulation S, both under the Securities Act of 1933. These notes have not been registered under the Securities Act and are subject to restrictions on their sale in the U.S. without registration or an exemption from registration requirements.

Albertsons operates a vast network of 2,273 retail food and drug stores, which include 1,732 pharmacies and 405 fuel centers, among other facilities. The company’s stores are present in 34 states and the District of Columbia, operating under more than 20 well-known banners. With annual revenue of $79.9 billion and a P/E ratio of 11.49, the company offers investors a dividend yield of 2.91%. In 2023, Albertsons Companies, along with its foundation, contributed over $350 million in food and financial support to various causes, including more than $35 million through their Nourishing Neighbors Program. For deeper insights into Albertsons’ financial metrics and growth potential, access the comprehensive Pro Research Report available on InvestingPro.

This press release includes forward-looking statements regarding the company’s expectations about the note offering and its intended use of proceeds. These statements are not guarantees of future performance and are subject to risks, uncertainties, and assumptions that could cause actual outcomes to differ materially.

The information contained in this article is based on a press release statement from Albertsons Companies, Inc.

In other recent news, Albertsons Companies, Inc. announced plans to offer $600 million in senior notes due in 2033. The proceeds from this offering will be used to repay $600 million in outstanding senior notes due in 2026. This move is part of Albertsons’ strategy to manage its debt effectively. Additionally, the company plans to redeem its entire $600 million aggregate principal amount of 7.50% senior notes due in 2026, with redemption scheduled for March 17, 2025.

Citi has resumed coverage on Albertsons with a Buy rating and set a price target of $26, noting the company’s potential for improved sales and profitability. RBC Capital Markets also adjusted its outlook on Albertsons, raising the price target to $22 and maintaining an Outperform rating. RBC cited the company’s robust foundation and ongoing reinvestment as factors that could narrow the valuation gap with competitors.

In other developments, reports indicate that Albertsons plans to lay off corporate and divisional support staff following the termination of its proposed merger with Kroger (NYSE:KR). These recent developments reflect Albertsons’ strategic initiatives and adjustments in response to market conditions and operational needs.

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