Loblaw Cos. Ltd. 'BBB' Rating Affirmed; Outlook Thresholds Revised

Toronto-based grocery retailer Loblaw Companies Ltd has adopted the revised lease accounting standard. As a result, leverage has increased to 2.9x from 2.6x; however, the company's underlying creditworthiness is unchanged. S&P Global Ratings affirmed its 'BBB' issuer credit rating on Loblaw. S&P Global Ratings revised its downgrade leverage threshold to 3.25x from 3.0x and its upgrade leverage threshold to 2.25x from 2x. The stable outlook reflects our expectation that over the next two years, consolidated adjusted debt-to-EBITDA will be in the low-to-mid-3x area for parent George Weston Ltd. (GWL), supported by Loblaw's steady profitability. TORONTO (S&P Global Ratings) Aug. 28, 2019--S&P Global Ratings today took the rating actions listed above. As of Jan. 1, 2019, Loblaw adopted the revised International

...August 28, 2019 - Toronto-based grocery retailer Loblaw Companies Ltd has adopted the revised lease accounting standard. As a result, leverage has increased to 2.9x from 2.6x; however, the company's underlying creditworthiness is unchanged. - S&P Global Ratings affirmed its '###' issuer credit rating on Loblaw. S&P Global Ratings revised its downgrade leverage threshold to 3.25x from 3.0x and its upgrade leverage threshold to 2.25x from 2x. - The stable outlook reflects our expectation that over the next two years, consolidated adjusted debt-to-EBITDA will be in the low-to-mid-3x area for parent George Weston Ltd. (GWL), supported by Loblaw's steady profitability. TORONTO (S&P Global Ratings) Aug. 28, 2019--S&P Global Ratings today took the rating actions listed above. As of Jan. 1, 2019, Loblaw adopted the revised International Financial Reporting Standards (IFRS) lease accounting standard (IFRS 16) requiring that off-balance-sheet lease obligations be capitalized on balance sheet. The...

Ratings Action