Skip navigation

Fitch Upgrades Supervalu Rating

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 At the same Fitch said it has withdrawn its IDR and issue ratings on New Albertsons and American Stores Co. LLC, based on its assumption of a successful completion of the sale of Supervalu's New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.

Read more: Duncan Takes CEO Spot at Supervalu Early

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.

Suggested Categories More from Supermarketnews
Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.