BRUSSELS — Moody’s Investors Service has assigned a Baa3 rating to approximately $512 million (U.S.) in new bonds to be issued by Delhaize Group here.
Delhaize said it would use the proceeds of the bond offering to refinance existing debt, including $300 million in U.S. notes due in 2014, and for general corporate purposes. Moody’s defines Baa3 as the riskiest category of investment grade credit. The outlook on the rating is stable.
“The Baa3 rating assigned to the new unsecured and unsubordinated bonds is in line with the rating on Delhaize's existing senior unsecured debt instruments," Andreas Rands, Moody's vice president-senior analyst and lead analyst for Delhaize, said in a statement. “The proposed bonds also benefit from the same cross-guarantee agreement entered into by certain subsidiaries of the group as that on its previously issued senior debt instruments."
Moody’s said the ratings are supported by stable cash flow, strong position in key markets and strong credit metrics for its rating category. The stable outlook on the rating reflects Delhaize's steady free cash flow generation and current financial policy focused on deleveraging, as well as Moody's expectation that the group will remain “comfortably positioned” in the Baa3 category.
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