S&P rates Albertsons loan BB, notes B+

S&P said it affirmed the B+ corporate credit rating on Albertsons Cos. LLC.

The agency also said it assigned a BB rating to the proposed B-6 term loan issued by Albertson's LLC, New Albertson's Inc. and Safeway Inc. with a 1 recovery rating, indicating 90% to 100% expected default recovery.

S&P also said it assigned a B+ rating to the proposed senior unsecured notes issued by Albertsons Cos., Safeway, New Albertson's and Albertson's with a 4 recovery rating, indicating 30% to 50% expected default recovery.

S&P also said it affirmed the BB ratings and 1 recovery ratings on the tranche B-4 and B-5 term loans, indicating 90% to 100% expected default recovery.

The outlook is positive.

The proceeds from this transaction will be used to refinance both the B-2 and B-3 term loans. The company also will draw $350 million on its unrated $4 billion asset-based revolver to fund the transaction, the agency said.

S&P also said it downgraded the ratings on the company's 2016, 2017 and 2019 Safeway notes two notches to B- from B+ and revised the recovery rating to 6 from 3, indicating 0 to 10% expected default recovery.

The agency also said it lowered the ratings on the 2020, 2021, 2027 and 2031 Safeway notes one notch to B- from B with a revised recovery rating to 6 from 5, indicating 0 to 10% expected default recovery.

S&P also said it affirmed the B- senior unsecured issue-level rating and 6 recovery rating, indicating 0 to 10% expected default recovery.

The ratings reflect an opinion that the group’s refinancing transaction is leverage neutral, the agency said.

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