US supermarket group Supervalu has revealed that it is currently negotiating with its existing creditors to amend and extend its senior secured credit facilities.
In a statement, the company emphasised that it was up to each individual lender to approve any changes in loan agreements.
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Supervalu said that it expects this process to be completed in early April.
Supervalu currently has long-term debt of about US$8bn. The company ended 2009 with leverage of 3.5 times operating income, as compared with its five-year historical average of 3 times.
Earlier this week (15 March), Morningstar analysts issued Supervalu with a BB credit rating.
The analysts said that this was a reflecting the company’s “mediocre financial health and credit metrics, lack of an economic moat, and high uncertainty rating”.
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By GlobalDataAccording to Morningstar, Supervalu has significant near-term cash obligations and debt maturities consisting of $165m in 2010, $700m in 2011, and $300m in 2012.
“We expect the firm to maintain the current debt level over the near term, with the potential for more material deleveraging in 2012 and beyond,” Morningstar said.
Supervalu shares slid following the announcement from an open of $17.41 yesterday to close at $17.14.
