S&P affirms Albertsons after Rite Aid merger called off

S&P said it affirmed its B issuer credit rating on Albertsons Cos. Inc. after the supermarket operator’s merger with Rite Aid was called off. The outlook is stable.

At the same time, S&P said it affirmed all existing issue-level ratings on the $11 billion in debt through the latest quarter ended June 16.

The debt includes the following:

The BB- issue-level rating on Albertsons' secured term loans. The recovery rating on this debt remains 1, indicating an expectation for very high (90%-100%; rounded estimate: 95%) recovery for lenders in the event of a payment default;

Also, the B+ issue-level rating on the senior unsecured notes maturing in 2024 and 2025. The recovery rating on this debt remains 2, indicating an expectation for substantial (70%-90%; rounded estimate: 85%) recovery for lenders in the event of a payment default;

The B issue-level rating on the Safeway notes. The recovery rating on this debt remains 4, reflecting an expectation for average (30%-50%; rounded estimate: 35%) recovery for lenders in the event of a payment default;

And the B- issue-level rating on the New Albertsons LP (NALP) notes. The recovery rating on this debt remains 5, reflecting an expectation for modest (10%-30%; rounded estimate: 10%) recovery for lenders in the event of a payment default.

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