S&P lifts Supervalu, loan B+

Standard & Poor's said it raised Supervalu Inc.'s corporate credit rating to B+ from B.

The agency also said it e removed all of the ratings from CreditWatch, where they were placed with positive implications in January.

The outlook is stable.

S&P also said it affirmed the company's unsecured debt at B- and revised the recovery rating on this debt to 6 from 5.

The agency also assigned a B+ rating and a 3 recovery rating to the new $1.5 billion term loan due 2019 and withdrew the ratings on the existing $850 million term loan due 2018 and $490 million 7½% notes due 2014 as these were repaid with proceeds from the new term loan.

The upgrade reflects the substantial reduction in debt and debt-like obligations following completion of the transaction, S&P said.

The agency said it believes Supervalu's more-focused operations should help it stabilize sales and improve margins after the divestiture of its underperforming retail banners.

The company has a weak business risk profile based on the intensely competitive nature of the food wholesaling and retailing businesses, S&P said, and a history of underperformance.

These factors are partially mitigated by a more manageable mix of remaining businesses supporting a greater potential to stabilize sales and improve profitability, the agency said.

© 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.