S&P rates Albertsons loan BB-

S&P said it assigned its BB- issue-level rating and 1 recovery rating to Albertsons Cos. Inc.'s proposed term loan B7 due 2025. The 1 recovery rating indicates an expectation for very high (90%-100%; rounded estimate: 95%) recovery for lenders in the event of a payment default.

These ratings are in line with S&P’s ratings on the company's existing first-lien term debt.

At the same time, S&P said it revised its recovery rating on the company's Safeway Inc. notes to 3 from 4. The 3 recovery rating indicates an expectation for meaningful (50%-70%; rounded estimate: 65%) recovery for lenders in the event of a payment default. The B issue-level rating remains unchanged.

S&P also revised its rounded recovery estimate on the company's New Albertsons LP notes to 15% from 10%.

All of the other ratings on Albertsons remain unchanged.

“We revised our recovery rating on the Safeway notes and our rounded estimate on the New Albertsons notes to reflect the additional residual value available to the Safeway noteholders due to the $1 billion reduction in senior secured debt contemplated in this transaction,” S&P said in a news release.

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