Skip navigation

Fitch Affirms Safeway's Debt Rating

Fitch Ratings has affirmed Safeway's BBB rating as stable, based on the chain's broad geographic presence, strong positions in key markets, cost reduction efforts and solid cash-flow generation.

NEW YORK — Fitch Ratings here said Wednesday it has affirmed Safeway's BBB rating as stable, based on the chain's broad geographic presence, strong positions in key markets, cost reduction efforts and solid cash-flow generation.

Fitch said its ratings also considered the challenging competitive environement, which has led to margin compression and a gradual weakening of the chain's credit metrics over the past three years.

"An increase in Safeway's financial leverage and its shareholder-friendly posture likely preclude any upward rating movement for the foreseeable future," Fitch said, "while a return to negative [identical-store] sales and further margin compression or a more aggressive approach to financing share repurchases could lead to a negative action."

The stable rating applies to Safeway's long-term issuer default rating, its senior unsecured notes and its $1.5 billion bank credit facilites at BBB; plus its short-term issuer default rating at F2; and commercial paper at F2.