Fitch rates Kroger notes BBB

Fitch Ratings said it assigned a rating of BBB to the Kroger Co.'s proposed issue of 10- and 30-year senior unsecured notes.

The outlook is stable.

The company also has a long-term issuer default rating of BBB, 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, Fitch said, balanced against ongoing share repurchase activity and intense price competition that will continue to pressure gross margins.

The ratings also consider news that Kroger has entered into a definitive agreement to acquire Harris Teeter Supermarkets, Inc. for $2.5 billion with plans to finance the deal with debt.

Fitch said it views the addition of Harris Teeter as neutral to moderately positive from a business perspective and believes integration risks are manageable.

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