Research Update: Albertsons Cos. Upgraded To 'BB+' On Robust Operating Performance, Reduced Leverage; Ratings Remain On Watch Positive

Albertsons Cos. Inc. (ACI) performed well over the last several quarters and all of its convertible preferred shares have been converted, which has improved its leverage metrics. We expect continued robust performance and a significant reduction in multi-employer pension plan (MEPP) liabilities will support further leverage reduction through 2024. Therefore, we raised our issuer credit rating on ACI to 'BB+' from 'BB' and our issue-level rating on its senior unsecured notes to 'BB+' from 'BB'. Our '3' recovery rating on the notes is unchanged, indicating our expectation for meaningful recovery (50%-70%; rounded estimate: 65%) in the event of a payment default or bankruptcy. At the same time, we raised our issue-level ratings on the senior notes issued by Safeway Inc.

...- Albertsons Cos. Inc. (ACI) performed well over the last several quarters and all of its convertible preferred shares have been converted, which has improved its leverage metrics. - We expect continued robust performance and a significant reduction in multi-employer pension plan (MEPP) liabilities will support further leverage reduction through 2024. - Therefore, we raised our issuer credit rating on ACI to '##+' from '##' and our issue-level rating on its senior unsecured notes to '##+' from '##'. Our '3' recovery rating on the notes is unchanged, indicating our expectation for meaningful recovery (50%-70%; rounded estimate: 65%) in the event of a payment default or bankruptcy. - At the same time, we raised our issue-level ratings on the senior notes issued by Safeway Inc. and New Albertsons L.P. (NALP) to '##+' from 'B+' and revised our recovery rating to '3' from '6'. The '3' recovery rating indicates our expectation for meaningful recovery (50%-70%; rounded estimate: 65%) in the event...

Research Update