Moody’s revises Delhaize to positive

Moody's Investors Service said it affirmed the Baa2 issuer rating and provisional Baa2 euro medium-term note program rating of food retailer Koninklijke Ahold Delhaize NV (Ahold Delhaize), and the Baa2 senior unsecured ratings of its 100%-owned and fully guaranteed subsidiary Ahold Finance USA, LLC.

Concurrently, the agency affirmed the Baa2 senior unsecured rating of Delhaize America, LLC, which is – following the completion of the merger between Ahold and Delhaize – a 100%-owned and fully guaranteed subsidiary of Ahold Delhaize.

Moody's also affirmed the Baa2 rating of Delhaize Group's €400 million bond due in February 2020, which was hived down to Delhaize Le Lion/De Leeuw BV (unrated), a 100% subsidiary of Ahold Delhaize, as it is guaranteed by Ahold Delhaize.

In addition, the agency affirmed the Baa2 senior unsecured ratings of Delhaize Group SA, which will be assumed by Ahold Delhaize.

Moody's noted that Ahold Delhaize's issuer rating is a continuation of the existing Ahold issuer rating, because Ahold – now renamed Ahold Delhaize – is the surviving entity post-merger. Delhaize Group's (Delhaize) Baa2 long term issuer rating was withdrawn.

The outlook was changed to positive from stable.

"Our decision to change the outlook on Ahold Delhaize's Baa2 ratings to positive reflects the completion of the merger on 24 July 2016 between Ahold and Delhaize," Sven Reinke, Moody's vice president, senior credit officer and lead analyst for Ahold Delhaize, said in a news release.

"The all-share merger is credit positive because it creates a leading food retailer in the Benelux, the eastern states of the U.S., and some parts of eastern and southeastern Europe with larger scale and improved competitive positions."

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