A&P Refinances Credit Facilities

The Great Atlantic & Pacific Tea Co. Inc. (A&P) has completed the refinancing of its existing senior debt on terms favorable to the company. A&P teamed up with Wells Fargo Capital Finance to arrange the new $300 million senior secured ABL facility and $270 million senior secured term loan through an amendment and restatement of its existing credit agreements.

The grocer's improved capital structure comes in the wake of upgraded ratings outlooks issued by Moody's and Standard & Poor's earlier this year. The new covenant-free debt arrangement enables a considerable reduction in interest expense and enhanced liquidity, which, according to A&P, is indicative of the debt market's confidence in its continuing progress and future growth prospects.

"Our new senior debt puts the company in a much stronger financial position and allows us to focus on investing in our business by supporting and accelerating our growth strategies," noted A&P President and CEO Paul Hertz.

In recent years, the company has struggled financially, emerging from Chapter 11 bankruptcy protection in 2012 as a privately held company and seemingly unable to regain its footing in the years since. Earlier this year, the grocer’s most recent management shakeup saw the departure of CEO Sam Martin, who had come aboard in 2010 to help the chain reverse its fortunes, prompting a longtime industry observer to tell PG that A&P lacked "the right formula" to succeed.

Montvale, N.J.-based A&P operates 300 stores in six states under the A&P, Best Cellars, Food Basics, The Food Emporium, Pathmark, Superfresh and Waldbaum's banners.