(Bloomberg) -- Kroger Co. is seeking to raise about $10 billion from a corporate bond sale that could be launched as soon as Tuesday and would help fund its proposed acquisition of fellow grocer Albertsons Cos., according to people familiar with the matter.
Kroger plans to sell notes in at least seven parts that would mature between 2026 and 2064, according to a filing. The proceeds, along with cash and other possible borrowings, will pay for the purchase even as antitrust scrutiny hangs over the deal.
The Cincinnati, Ohio-based supermarket chain held investor calls that were arranged by Citigroup Inc. and Wells Fargo & Co. on Monday ahead of a potential debt offering. The grocer also launched a $7.44 billion offer to exchange Albertsons bonds with new notes.
Representatives for Kroger, Citigroup and Wells Fargo declined to comment.
Whether Kroger is able to purchase its smaller peer remains in doubt. A trial is set to begin Aug. 26 on the Federal Trade Commission’s lawsuit to block the deal, initially valued in 2022 at $24.6 billion. A separate case involving Colorado’s opposition to the proposed buyout is scheduled to start Sept. 30. The supermarket operators have proposed to sell nearly 600 stores and lower grocery prices by $1 billion.
JPMorgan Chase & Co. remains overweight on Albertsons’ debt, saying in an Aug. 16 report that the firm’s notes would move toward Kroger bonds’ levels if the takeover is completed. Even if there’s just a 50-50 chance of the buyout happening, fair value for Albertsons’ notes is tighter than recent spreads, analysts including Carla Casella wrote.
(Updates with bond sale size and timing in the first paragraph)
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