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Moody's ups Supervalu notes to Ba3
Moody's Investors Service said it affirmed Supervalu, Inc.'s corporate family rating at Ba3 and upgraded various senior unsecured notes to Ba3 (LGD 4, 58%) from B1 (LGD 4, 60%).
The affirmation reflects the view that the company will continue to maintain a solid credit profile for its ratings, despite the current weak operating environment, the agency said. It also incorporates the recently announced non-cash goodwill impairment charge.
According to Moody's, the upgrade of the senior unsecured notes results from a reconsideration of certain priority of claim assumptions with regard to non-debt liabilities.
The Ba3 corporate family rating reflects the low business risk and overall stability of the supermarket business, credit metrics that are solid for the rating, the company's large scale, its strong supply chain and strong national presence, the agency said.
Ratings also reflect the heavy capital expenditures needed to freshen the store base, the negative economic outlook, and the need for promotional price cuts in this very competitive sector of retail, Moody's noted.
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