Moody's gives SuperValu notes Caa1

Moody's Investors Service said it assigned a Caa1 rating to SuperValu Inc.'s proposed $400 million senior unsecured notes maturing 2021.

In addition, Moody's affirmed SuperValu's B3 corporate family rating, B3-PD probability of default rating, the B1 rating on its $1.5 billion senior secured term loan and the Caa1 rating on its senior unsecured notes maturing 2016.

Moody's also assigned a SGL-2 speculative grade liquidity rating to SuperValu.

The outlook is stable.

The proceeds of the new unsecured notes will be used to refinance a portion of SuperValu's existing senior unsecured notes.

"The refinancing of a portion of the unsecured notes maturing in 2016 will improve SuperValu's liquidity profile by extending and staggering its debt maturities," Moody's senior analyst Mickey Chadha said in a news release. "However, the company continues to face challenges as evidenced by the decline in identical store sales in its retail food and Save-A-Lot segments, operating losses in its retail food segment and margin erosion for its independent business."

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