Fitch rates Kroger notes BBB

Fitch Ratings said it assigned a rating of BBB to the Kroger Co.'s proposed issuance of senior unsecured notes due 2016, 2019 and 2021.

The outlook is stable.

The proceeds will be used to fund the merger with Harris Teeter Supermarkets, Inc. and for general corporate purposes, Fitch said.

Kroger has a long-term issuer default rating of BBB, senior unsecured notes rating of BBB, bank credit facility rating of BBB, short-term issuer default rating of F2 and commercial-paper rating of F2.

The ratings are supported by the company's industry leading sales growth and market share gains, the agency said, balanced against ongoing share-repurchase activity and intense price competition that will continue to pressure gross margins.

The ratings also consider Kroger's planned merger with Harris Teeter for $2.5 billion, Fitch said. The agency said it views the addition of Harris Teeter as neutral to moderately positive from a business perspective. The risks associated with integrating it into Kroger's network are manageable, Fitch said.

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