...Albertsons improved its S&P Global Ratings-adjusted leverage over the last two years. However, we view the company's $4 billion special dividend in January 2023, which it partially financed with revolver borrowings, as credit negative because it will cause its leverage to remain elevated over the next 12 months. Albertsons reduced its S&P Global Ratings adjusted leverage by over a turn--to 3.1x from 4.3x--between the quarters ending December 2020 and December 2022. Over these two years, the company's funded debt (as reflected in its S&P Global Ratings reported debt figure) increased approximately 9% while its reported EBITDA rose just over 15%. In January 2023, a temporarily restraining order preventing the company's payment of the $4 billion special dividend was lifted, enabling it to pay the dividend. Albertsons used a $1.4 billion draw on its asset-based lending (ABL) facility, along with cash on hand, to fund the dividend. The completion of the dividend will reduce the company's purchase...
