Fitch affirms Safeway

Fitch Ratings said it affirmed Safeway Inc.'s long-term issuer default rating at BBB, short-term issuer default rating at F2, commercial paper at F2, senior unsecured notes at BBB and $1.6 billion bank credit facilities at BBB.

The outlook is stable.

Ratings reflect Safeway's strong market positions in its key markets, successful store strategy resulting in positive operating trends and good cash flow generation, and management's dedication to reducing debt over the past few years, the agency said.

The issuer's total adjusted debt-to-operating EBITDAR ratio improved to 2.8 times for the 12 months ended June 14 from 3.1 times in fiscal 2006, following several years of debt reduction as well as higher sales and operating profitability, Fitch said.

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