LONG-TERM DEBT AND CAPITALIZED LEASE OBLIGATIONS

The Company’s long-term debt as of June 16, 2018 and February 24, 2018, net of unamortized debt discounts of $238.4 million and $249.6 million, respectively, and deferred financing costs of $75.1 million and $79.7 million, respectively, consisted of the following (in millions):



	June 16, 2018			February 24, 2018
Albertsons Term Loans due 2021 to 2023, interest rate range of 4.65% to 5.32%	$	5,604.3		$	5,610.7
Albertsons Senior Unsecured Notes due 2024 and 2025, interest rate of 6.625% and 5.750%, respectively	2,477.1			2,476.1
NALP Notes due 2027 to 2031, interest rate range of 6.52% to 8.70%	1,401.3			1,393.9
Safeway Notes due 2019 to 2031, interest rate range of 3.95% to 7.45%	1,266.8			1,266.9
Other Notes Payable, unsecured	230.2			242.7
Mortgage Notes Payable, secured	20.7			20.9
Total debt	11,000.4			11,011.2
Less current maturities	(65.8		)	(66.1		)
Long-term portion	$	10,934.6		$	10,945.1

The Company's term loans (the "Albertsons Term Loans"), asset-based loan ("ABL") facility (the "ABL Facility") and certain of the outstanding notes and debentures have restrictive covenants, subject to the right to cure in certain circumstances, calling for the acceleration of payments due in the event of a breach of a covenant or a default in the payment of a specified amount of indebtedness due under certain debt arrangements. There are no restrictions on the Company's ability to receive distributions from its subsidiaries to fund interest and principal payments due under the ABL Facility, the Albertsons Term Loans and the Company's senior unsecured notes (the "Senior Unsecured Notes"). Each of the ABL Facility, Albertsons Term Loans and the Senior Unsecured Notes restrict the ability of the Company to pay dividends and distribute property to the Company's stockholders. As a result, all of the Company's consolidated net assets are effectively restricted with respect to their ability to be transferred to the Company's stockholders. Notwithstanding the foregoing, the ABL Facility, Albertsons Term Loans and the Senior Unsecured Notes each contain customary exceptions for certain dividends and distributions, including the ability to make cumulative distributions under the Albertsons Term Loans and Senior Unsecured Notes of up to the greater of $1.0 billion or 4% of the Company's total assets (which is measured at the time of such distribution) and the ability to make distributions if certain payment conditions are satisfied under the ABL Facility. The Company was in compliance with all such covenants and provisions as of and for the 16 weeks ended June 16, 2018.

Asset-Based Loan Facility

As of June 16, 2018 and February 24, 2018, there were no loans outstanding under the Company's ABL Facility, and letters of credit ("LOC") issued under the LOC sub-facility were $572.5 million and $576.8 million, respectively.

Capitalized Lease Obligations

The Company's capitalized lease obligations were $841.3 million and $864.6 million as of June 16, 2018 and February 24, 2018, respectively. Current maturities of capitalized lease obligations were $103.6 million and $102.1 million and long-term maturities were $737.7 million and $762.5 million, as of June 16, 2018 and February 24, 2018, respectively.

Merger Related Financing

The Company received a debt commitment letter dated as of February 18, 2018, as amended and restated on March 12, 2018 and as further amended and restated on May 8, 2018 (the "Commitment Letter"), pursuant to which, among other things, the financial institutions party thereto (the "Commitment Parties") have committed to provide the Company with (i) $4,667.0 million of commitments to a new $5,000.0 million aggregate principal amount best efforts asset-based revolving credit facility (the "Best-Efforts ABL Facility"); (ii) incremental commitments under the ABL Facility in an aggregate principal amount of $1,000.0 million in the event that the Best-Efforts ABL Facility does not become effective on the closing date; (iii) a new asset-based term loan facility in an aggregate principal amount of $1,500.0 million (the "ABL Term Loan Facility"); and (iv) a new secured bridge loan facility in an aggregate principal amount of $500.0 million less the gross proceeds received by the Company and its subsidiaries of new senior notes issued prior to the closing date (the "Senior Secured Bridge Facility") (collectively, the "Financing"), in each case on the terms and subject to the conditions set forth in the Commitment Letter. The proceeds of the Financing will be used, among other things, to partially refinance certain of Rite Aid’s existing indebtedness that is outstanding as of the closing date, including Rite Aid’s 6.125% Senior Notes due 2023 and Rite Aid’s revolving credit facility, to pay fees and expenses in connection with the contemplated merger with Rite Aid and to finance cash consideration, if any is elected, in connection with the merger. The Best-Efforts ABL Facility will be utilized by the Company only if the remaining $333.0 million of commitments are fully allocated to new or existing lenders prior to the date on which the merger is consummated, in which case the incremental commitments described under clause (ii) above will cease to apply.

On June 25, 2018, subsequent to the end of the first quarter of fiscal 2018, the Company issued $750.0 million in aggregate principal amount of floating rate senior secured notes (the "Floating Rate Notes") at an issue price of 99.5%. The Floating Rate Notes bear interest at LIBOR plus 3.75% per annum. The Floating Rate Notes mature on January 15, 2024, and interest on the notes is payable quarterly in arrears on January 15, April 15, July 15 and October 15, commencing on October 15, 2018. Following the closing of the merger with Rite Aid, the Floating Rate Notes will be secured as described below. If the contemplated merger transaction with Rite Aid is not consummated on or prior to November 18, 2018, the Company will be required to redeem all of the Floating Rate Notes at a redemption price equal to 99.5% of the aggregate principal amount of notes then outstanding, plus accrued and unpaid interest to, but not including, the date of such redemption. Upon the issuance of the Floating Rate Notes, the commitments with respect to the Senior Secured Bridged Facility terminated pursuant to the terms of the Commitment Letter.

The Best-Efforts ABL Facility, the incremental commitments under the ABL Facility and the ABL Term Loan Facility will be guaranteed on a joint and several basis by each of the Company’s existing and future direct and indirect wholly-owned domestic subsidiaries that is not a borrower, excluding certain immaterial and other subsidiaries, such as insurance subsidiaries. In addition, the Best-Efforts ABL Facility, the incremental commitments under the ABL Facility and the ABL Term Loan Facility will be secured, subject to certain exceptions, by (i) perfected first priority (subject to permitted liens) security interests and liens on the ABL Priority Collateral (as defined herein) (which includes Rite Aid assets that will constitute ABL Priority Collateral at closing) and (ii) perfected second priority (subject to permitted liens) security interests in and liens on the Term Loan Priority Collateral (as defined herein). Initially, the Floating Rate Notes will be guaranteed on a joint and several basis by each of the Company’s existing and future direct and indirect wholly-owned domestic subsidiaries that are guarantors or are borrowers under the Albertsons Term Loans. In addition, the Floating Rate Notes will be secured, subject to certain exceptions, by (i) perfected first priority (subject to permitted liens) security interests and liens on the Term Loan Priority Collateral (which includes Rite Aid assets that will constitute Term Loan Priority Collateral at closing) and (ii) perfected second priority (subject to permitted liens) security interests in and liens on the ABL Priority Collateral (which includes Rite Aid assets that will constitute ABL Priority Collateral at closing). The Floating Rate Notes will not be secured by any of the assets of New Albertsons L.P. ("NALP") and its subsidiaries and, to the extent applicable, shall be limited to 10% of the Consolidated Net Tangible Assets of Safeway Inc. (as defined in the indentures governing the Safeway Notes) as determined on the date of such lien incurrence. The ABL Priority Collateral, as used herein, refers to substantially all of the accounts receivable, inventory, documents of title related to inventory, instruments, general intangibles (excluding any equity interests of the Company or any of its subsidiaries and intellectual property), chattel paper, and supporting obligations of the Company and its subsidiaries that are borrowers or guarantors under the ABL Facility. The Term Loan Priority Collateral, as used herein, refers to substantially all of the assets of the borrowers and guarantors under the Albertsons Term Loans (other than the ABL Priority Collateral), including real property and the equity interests of the borrowers and the Company’s "Restricted Subsidiaries" (as defined in the agreement governing the Albertsons Term Loans).

The Commitment Parties’ commitment to provide the applicable Financing is subject to certain conditions, including consummation of the merger in accordance with the merger agreement substantially concurrently with the initial borrowing under the Financing; the negotiation and execution of definitive documentation in respect of the Financing consistent with the Commitment Letter (including certain customary closing deliverables); delivery of certain historical and pro forma financial information in respect of the Company and Rite Aid and their respective subsidiaries; the absence of a Company Material Adverse Effect (as defined in the merger agreement by and among the Company, certain of its subsidiaries and Rite Aid); the accuracy of certain specified representations and warranties in the merger agreement and in the definitive documentation in respect of the Financing; completion of a third party appraisal and field examination in respect of the assets of Rite Aid and its subsidiaries; minimum excess availability under the applicable asset based revolving credit facility of not less than $2,000.0 million (including up to $500.0 million of cash on hand); and certain other customary closing conditions.

The Company has successfully syndicated all of the financing required to close the Rite Aid merger. The closing of the merger is not subject to any debt financing condition or contingency.