...sheet cash and revolver borrowings ($600 million in balance sheet cash and about a $400 million revolver draw) and the $2 billion of proceeds from its new term loan B7 due 2025. As part of this transaction, Albertsons also plans to extend the maturity of its asset-based lending (ABL) revolver to 2023 and seek certain modifications to the existing ABL agreement. We view the transaction as slightly deleveraging and estimate that it will reduce the company's S&P lease-adjusted debt leverage by less than half a turn. This will cause Albertsons' S&P adjusted leverage to remain in the mid-6x area through the end of fiscal year 2018. Albertsons' second-quarter 2018 earnings came in slightly ahead of our expectations on an increase in fuel sales and a 1% increase in identical-store sales, which were offset by store closures. The company's gross margin increased by 40 basis points on cost-savings initiatives, a lower shrink expense as a percentage of sales, reduced advertising costs, and an improved...
