S&P keeps Whole Foods on watch

Standard & Poor's said it announced that while the ratings on Whole Foods Market Inc., including the BBB- corporate credit rating, currently remain on CreditWatch with negative implications, where they were placed on Feb. 22.

The agency said it will lower the corporate credit rating to BB+ from BBB- upon closure of its acquisition of Wild Oats Inc.

At that time, S&P noted that it will also remove the ratings from CreditWatch and the outlook will be stable.

This action incorporates the following: Whole Foods is financing the transaction with $700 million of senior term loans and also concurrently upsizing its senior revolving credit facility to $250 million from $100 million and while the agency believes Whole Foods will recognize meaningful synergies from the acquisition of Wild Oats over time, credit metrics pro forma for this acquisition are still anticipated to remain weak for current ratings over the next few years.

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