Moody’s rates Kroger notes Baa2

Moody's Investors Service said it assigned a Baa2 rating to Kroger Co.'s proposed new multi-tranche $1.1 billion senior unsecured notes.

Proceeds will be used to refinance the debt used to finance the acquisition of Roundy's Supermarkets, Inc., which closed on Dec. 18, and to refinance Kroger's senior unsecured notes that matured in October 2015.

"While the debt-financed acquisition of Roundy's will modestly weaken Kroger's credit metrics initially, the transaction is long term credit positive because it will enhance Kroger's competitive position by increasing its scale and geographic diversity with minimal store overlap," Moody's senior analyst Mickey Chadha said in a news release.

"Despite Roundy's underperformance in the last couple of years, Roundy's has a good regional market identity and an increasing presence in the Chicago market with the expansion of the Mariano's banner which has resonated well with consumers and we anticipate that Kroger will continue to expand in the Chicago area while maintaining the store base in Wisconsin."

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.