ProposedLoan Stock Redemption

Sainsbury(J) PLC
17 July 2006




17 July 2006





Proposal to repurchase outstanding £2.8 million irredeemable unsecured loan
stock



J Sainsbury plc has today announced a proposal to buy back all the outstanding
eight per cent £2.8 million irredeemable unsecured loan stock, issued in 1974,
at a minimum fixed price of £1.48 for each £1 of nominal stock in issue.



On 24 March 2006, Sainsbury's repurchased all £ 1.7 billion of outstanding
unsecured notes issued under its £2.5 billion Euro Medium Term Note Programme
and simultaneously raised £2.07 billion of new debt through two secured
financing structures.  As a result of this transaction the company withdrew its
senior, unsecured long-term credit ratings and it is judged to be in the best
interests of all of the remaining unsecured stockholders for the company to
offer to redeem this outstanding obligation.  Sainsbury's is now proposing to
buy back all the outstanding loan stock at a minimum fixed price plus accrued
interest, following an extraordinary meeting of the stockholders to be held on 9
August 2006.  These proposals will increase the flexibility of the debt
structure and simplify the loan arrangements, whilst at the same time treating
stockholders equitably.



There is a mechanism, by which it is possible for the purchase price to exceed
the minimum fixed price and details are contained in the consent solicitation
memorandum being sent to stockholders today.



It is anticipated that this transaction will be completed in September 2006.







Enquiries:

Investor relations                         Media

[phone]                       [phone]

Lynda Ashton                               Pip Wood





Notes

(1)      The credit ratings assigned to Sainsbury's are:

  • Standard & Poor's Rating Service a senior unsecured short-term rating of
    A-3 and a corporate credit rating of BBB-
  • Moody's Rating Investor Service a senior unsecured short-term rating of
    'Not Prime' and a corporate family rating of Baa3






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