S&P ups Albertsons

S&P said it raised Albertsons Cos. Inc.’s rating to BB- from B+ and affirmed the rating on the company’s senior unsecured notes at BB-. The agency did revise the notes recovery rating to 3 from 2, and the recovery percentage is capped at 50%-70% (rounded estimate: 65%) in default or bankruptcy.

For subordinated debtholders Safeway Inc. and New Albertsons LP, S&P upgraded the issue-level rating to B from B-, in line with the corporate credit rating. The 6 recovery rating is unchanged, indicating an expectation of 0%-10% recovery (rounded estimate: 0%) in default or bankruptcy.

“We see continued credit metric upside for ACI over the next year, given strong top-line trends (+13.8 identical sales growth in the latest quarter) and its transition from a highly leveraged privately held entity to a public company with a more conservative balance sheet,” S&P said in a press release.

The outlook is positive.

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