CHICAGO — In anticipation of the closing of the Supervalu-Cerberus transaction next month, Fitch Ratings here said Friday it has upgraded its Issuer Default Rating on Supervalu to B-minus from CCC.
It also said it has assigned ratings of BB-/RR1 to the company' new $900 million asset-based lending facility and its $1.5 billion secured term loan, with a stable rating outlook. At the same Fitch said it has withdrawn its IDR and issue ratings on New Albertsons and American Stores Co. LLC, based on its assumption of a successful completion of the sale of Supervalu's New Albertsons business to AB Acquisition, an affiliate of a Cerberus Capital Management-led consortium.
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According to Fitch, the upgrade reflects Supervalu's improved business mix after the sale, which will reduce its exposure to competition in the traditional supermarket sector and also the expectation of relatively steady financial leverage at the current level of 4.8 times. In addition, the ratings reflect the company's weak operating trends, particularly within the independent business and Save-A-Lot segments, and the refinancing risk related to a sizable $1 billion senior note maturity in May 2016, Fitch noted.
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