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Regional wholesale grocery cooperative Unified Grocers has completed two long-term credit agreements at favorable terms — a 5-year revolving credit facility for the cooperative and a new 3-year credit line -- for the its wholly-owned finance company, Grocers Capital Company.
"While interest rates remain near historic lows, this is a very challenging environment in which to seek credit – perhaps tougher and more restrictive than ever before," said Al Plamann, president and CEO of Los Angeles-based Unified. "Banks continue to be very careful and cautious about lending money. They prefer to do business with companies that have strong balance sheets, and I'm very pleased that we have easily met this requirement.”
The new revolving credit facility is used to refinance the existing line of credit, and the borrowing capacity remains at $275 million and extends until October 2015. The financing was led by Wells Fargo Bank with seven other banks also participating in the transaction. Instead of waiting another year for its existing revolving credit agreement to mature, Unified considered it prudent to refinance early to eliminate future risks that could develop during a volatile economy. The new financing agreement contains competitive borrowing rates and flexible terms and conditions for the wholesaler.
Unified also announced that its finance subsidiary, Grocers Capital Co. has executed a new three-year credit facility with a borrowing capacity of $15 million. This agreement is led by California Bank & Trust with NCB, FSB participating. This credit line is available to make loans to Unified's member retailers.
"We have well-established relationships with all of the banks participating in both of these credit agreements," Plamann said.
Unified Grocers is a retailer-owned wholesale grocery distributor that supplies independent retailers throughout the western United States. Unified and its subsidiaries generated approximately $4.1 billion in sales during fiscal 2009.