The ratings on Toronto-based George Weston Ltd. reflect what Standard&Poor's Ratings Services views as the company's strong market position in food processing and food distribution through its 63%-owned subsidiary, Loblaw Companies Ltd. (BBB/Stable/--), as well as the financial flexibility afforded by its substantial cash balances and liquid Loblaw holdings. We believe these strengths are partially offset by weaknesses in Loblaw's operating infrastructure, which have brought about significant capital and operating expenditures for the company amid challenging market conditions. Moreover, we believe that the potential redeployment of George Weston's large cash balances for acquisitions could introduce some financial and operating risks. We rate George Weston and its 63%-owned subsidiary, Loblaw, the same, but the ratings are linked, not equalized,
