Fitch expects to rate Supervalu note B+

Fitch Ratings said it expects to assign a B+ rating to Supervalu Inc.'s new $500 million senior unsecured notes due 2014.

The outlook is negative.

Proceeds from the new notes will be used to finance a portion of the purchase of Albertson's Inc.'s 7.25% hybrid income term security units (HITS), for which Supervalu and Albertson's have jointly tendered. If all the units are tendered, the purchase price will be $1.16 billion. The new notes will rank equally with all of Supervalu's other senior unsecured debt.

The agency said the rating on Supervalu's new notes reflects the company's sizeable and geographically diverse store base and strong market shares in key markets. Also considered are the risks associated with integrating the Supervalu and Albertson's assets and the ability to create a strategy to address the competitive landscape.

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