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 62.8%-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 factors are partially offset by weaknesses in Loblaw's operating infrastructure and challenging market conditions leading to profitability that is somewhat weak for the ratings. Moreover, we believe that the potential redeployment of George Weston's large cash balances for acquisitions could introduce some financial and operating risk. We rate Loblaw and its 62.8% owner, George Weston Ltd. (BBB/Stable/--), the same, but the ratings are linked, not equalized,
