S&P ups Delhaize view to positive

Standard & Poor's said affirmed the BB+ corporate credit rating and senior unsecured ratings on Delhaize America Inc. , and revised its outlook to positive from stable reflecting slowly but steadily improving financial measures, a trend that the agency anticipates will continue.

The ratings are based on the company's participation in the highly competitive supermarket industry, regional concentration, smaller scale relative to major operators and somewhat weak credit protection measures, S&P said.

These factors are mitigated by the good track record of its core business, Food Lion (80% of the store base); increasing format diversification and above-average operating margins, the agency said.

Its total debt-to-EBITDA ratio was about 2.9x. The company generated about $1.4 billion of free cash flow between 2002 and 2005 as it focused on repaying debt, S&P said.

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