S&P downgrades Albertsons

S&P said it lowered its corporate credit rating on Albertsons Cos. LLC to B from B+.

The outlook is stable.

Concurrently, the agency lowered the issue-level rating on the company's term loans to BB- from BB. The recovery rating remains 1, indicating an expectation for very high (90%-100%; rounded estimate: 95%) recovery for lenders in the event of a payment default.

S&P also lowered the issue-level rating on the company's senior unsecured notes to B from B+. The recovery rating remains 4, indicating an expectation for average (30%-50%; rounded estimate: 30%) recovery.

The agency also lowered the issue-level rating on the Safeway Inc. and New Albertson's Inc. unsecured notes to CCC+ from B-. The recovery rating remains 6, indicating an expectation for negligible (0%-10%; rounded estimate: 0%) recovery.

“The downgrade reflects ACL's weaker-than-expected performance and our view that industry conditions will remain challenging in 2018,” S&P said in a news release.

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