Albertsons Companies Inc. filed SEC Form 8-K: Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation, Financial Statements and Exhibits
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Item 1.01. Entry into a Material Definitive Agreement.
On August 27, 2025 (the “Effective Date”), Albertsons Companies, Inc. (the “Company”) and certain of its subsidiaries entered into a Fifth Amended and Restated Asset-Based Revolving Credit Agreement (the “Restated Credit Agreement”) pursuant to which its existing Fourth Amended and Restated Asset-Based Revolving Credit Agreement, dated as of December 20, 2021, as amended prior to the Effective Date (the “Existing Credit Agreement”), by and among the Company, certain subsidiaries of the Company as borrowers or guarantors, the lenders from time to time party thereto and Bank of America, N.A., as administrative agent and collateral agent, was amended and restated in its entirety.
Structure. The Restated Credit Agreement provides for a $4.0 billion senior secured revolving credit facility (the “ABL Facility”), with a $1.5 billion letter of credit subfacility and a $250 million swingline loan subfacility, subject to a borrowing base (described below). In addition, the Restated Credit Agreement also permits the Company to increase the commitments under the Restated Credit Agreement from time to time by up to the greater of (x) $1.5 billion and (y) the amount by which the borrowing base exceeds the commitments under the ABL Facility, subject to, among other things, the receipt of additional commitments from existing and/or new lenders. The proceeds of the loans under the Restated Credit Agreement may be used for working capital and general corporate purposes.
Maturity. The Restated Credit Agreement matures on August 27, 2030.
Interest. The ABL Facility bears interest, at the Company’s option, at (i) the base rate, plus an applicable margin equal to (a) 0.25% (if daily average excess availability during the most recently ended fiscal quarter is greater than or equal to 50% of the aggregate commitments), (b) 0.375% (if daily average excess availability during the most recently ended fiscal quarter is less than 50% but greater than or equal to 25% of the aggregate commitments) or (c) 0.50% (if daily average excess availability during the most recently ended fiscal quarter is less than 25% of the aggregate commitments), or (ii) term SOFR (based on one, three or six-month interest periods), plus an applicable margin equal to (x) 1.25% (if daily average excess availability during the most recently ended fiscal quarter is greater than or equal to 50% of the aggregate commitments), (y) 1.375% (if daily average excess availability during the most recently ended fiscal quarter is less than 50% but greater than or equal to 25% of the aggregate commitments) or (z) 1.50% (if daily average excess availability during the most recently ended fiscal quarter is less than 50% of the aggregate commitments). The base rate means the highest of the prime rate, the federal funds rate plus a margin equal to 0.50%, the term SOFR rate for a 1-month interest period plus a margin equal to 1.0%, and 1.0%. If not paid when due, the ABL Facility bears interest at the rate otherwise applicable to such loans at such time plus an additional 2.0% per annum during the continuance of such payment event of default and the letter of credit fees increase by 2.0%. Other overdue amounts bear interest at a rate equal to the rate otherwise applicable to such revolving loans bearing interest at the base rate at such time, plus 2.0% until such amounts are paid in full. Interest is due and payable in arrears on the first business day of each month for loans bearing interest at the base rate and at the end of an interest period (or at each three-month interval in the case of loans with interest periods greater than three months) in the case of loans bearing interest at the term SOFR rate.
Fees. Certain customary closing fees, arrangement fees, administration fees, commitment fees and letter of credit fees are payable to the lenders and the agents under the Restated Credit Agreement, including a commitment fee on the average daily unused amount of the ABL Facility, in an amount equal to 0.25% per annum.
The Company may borrow, repay and reborrow the loans under the ABL Facility until August 26, 2030, at which time the commitments will terminate and all outstanding loans, together with all accrued and unpaid interest, must be repaid. The Company may prepay the loans and terminate the loan commitments, in whole or in part, at any time without premium or penalty, subject to certain conditions, including minimum amounts and reimbursement of certain costs in the case of prepayments of term SOFR loans.
Borrowing Base. The amount of loans and letters of credit available under the Restated Credit Agreement is limited to the lesser of the aggregate commitments under the Restated Credit Agreement or an amount determined pursuant to a borrowing base. The borrowing base at any time is equal to 90% of eligible credit card receivables, plus 90% of the net amount of eligible pharmacy receivables, plus 85% of the product of the average per-script net
orderly liquidation value of the eligible prescription files of the borrowers and the guarantors thereunder (the “ABL Eligible Pharmacy Scripts”), multiplied by the number of such ABL Eligible Pharmacy Scripts, plus 90% (or 92.5% for the three consecutive four-week fiscal accounting periods ending nearest to the end of February, March and April of each year) of the lower of cost or market value of eligible inventory (other than perishable inventory and pharmacy inventory) multiplied by the appraised orderly liquidation value thereof, plus 85% of the lower of cost or market value of eligible pharmacy inventory multiplied by the appraised orderly liquidation value thereof, plus 90% (or 92.5% for the three consecutive four-week fiscal accounting periods ending nearest to the end of February, March and April of each year) of the lower of cost or market value of eligible perishable inventory multiplied by the appraised orderly liquidation value thereof (subject to a cap (the “Perishables Cap”) of 25% of the borrowing base, without giving effect to the shared cap applicable to ABL Eligible Pharmacy Scripts and pharmacy inventory described below), minus eligibility reserves. The aggregate portion of the borrowing base attributable to ABL Eligible Pharmacy Scripts and pharmacy inventory may not exceed the lesser of (x) $1 billion and 25% of the borrowing base without giving effect to the Perishables Cap. The eligibility of accounts receivable, inventory and prescription files for inclusion in the borrowing base will be determined in accordance with certain customary criteria specified in the Restated Credit Agreement, including periodic appraisals.
Guarantees. Subject to certain exceptions as set forth in the Restated Credit Agreement, the amounts outstanding under the Restated Credit Agreement are guaranteed by each of the Company’s existing and future direct and indirect wholly-owned domestic subsidiaries that are not borrowers.
Security. Subject to certain exceptions as set forth in the Restated Credit Agreement, the obligations under the Restated Credit Agreement are secured by a first-priority security interest in and lien on substantially all assets of the Company, each other borrower and each guarantor.
Affirmative and Negative Covenants. The Restated Credit Agreement contains various affirmative and negative covenants (in each case, subject to customary exceptions as set forth in the Restated Credit Agreement), applicable to the Company and its restricted subsidiaries, to: (i) dispose of assets; (ii) incur additional indebtedness, issue preferred stock and guarantee obligations; (iii) prepay other indebtedness; (iv) make certain restricted payments, including the payment of dividends; (v) create liens on assets or agree to restrictions on the creation of liens on assets; (vi) make investments, loans or advances; (vii) restrict dividends and distributions from subsidiaries; (viii) engage in mergers or consolidations; (ix) engage in certain transactions with affiliates; (x) amend the terms of any organizational documents or material indebtedness; (xi) change lines of business; or (xii) make certain accounting changes.
Financial Covenants. The Restated Credit Agreement provides that if (i) excess availability is less than (a) 10% of the lesser of the aggregate commitments and the then-current borrowing base at any time or (b) $250 million at any time or (ii) an event of default is continuing, the Company and its restricted subsidiaries, on a consolidated basis, must maintain a fixed charge coverage ratio of 1.0:1.0 from the date such triggering event occurs until such event of default is cured or waived, if the triggering event arises as a result of (i) above, and/or the 30th day that all such triggers under (i) above no longer exist.
Events of Default. The Restated Credit Agreement contains customary events of default (subject to exceptions, thresholds and grace periods as set forth in the Restated Credit Agreement), including, without limitation: (i) nonpayment of principal or interest; (ii) failure to perform or observe covenants; (iii) inaccuracy or breaches of representations and warranties; (iv) cross-defaults and cross-accelerations with certain other indebtedness; (v) certain bankruptcy related events; (vi) impairment of security interests in collateral; (vii) invalidity of guarantees; (viii) material judgments; (ix) certain ERISA matters; and (x) certain change of control events.
The foregoing description of the Restated Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the Restated Credit Agreement, which is filed as Exhibit 10.1 hereto and incorporated by reference herein.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 above is hereby incorporated by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits. The following exhibits are being filed herewith:
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Exhibit No. |
Description |
| 10.1 | Fifth Amended and Restated Asset-Based Revolving Credit Agreement, dated as of August 27, 2025, by and among Albertsons Companies. Inc. certain of its subsidiaries signatory thereto, the lenders from time to time party thereto and Bank of America, N.A. as administrative agent and collateral agent. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Dated: August 27, 2025 |
Albertsons Companies, Inc. (Registrant) | |||
| By: | /s/ Thomas Moriarty | |||
| Name: | Thomas Moriarty | |||
| Title: | Executive Vice President, M&A and Corporate Affairs | |||