S&P rates Albertsons notes BB-

S&P said it assigned its BB- issue-level rating and 2 recovery rating to Albertsons Cos. Inc.'s proposed new senior unsecured notes.

In total, the notes consist of $1.25 billion due in 2026 and 2029. The 2 recovery rating indicates S&P’s expectation for substantial recovery to lenders (70%-90%; rounded estimate: 85%).

“Our issuer credit rating (B+/stable) on the company and all other issue-level ratings are unchanged,” said S&P in a press release.

Albertsons says it will use the proceeds to refinance the $1.25 billion of 6 5/8% senior unsecured notes due 2024.

“As a result, the refinancing is leverage neutral and extends the company's overall debt maturity profile. We also expect Albertsons to use cash to repay the outstanding $137 million of Safeway notes at maturity on Aug. 15, saving approximately $5.5 million in interest per year,” S&P said.

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