Bond Service Downgrades Sobeys, Empire

STELLARTON, Nova Scotia — Citing increased financial leverage and weakened profitability, Dominion Bond Rating Service slashed its rating of Sobeys and its parent company Empire Co. here. The agency downgraded Sobeys long-term debt tow notches from BBB (high) to BBB (low). Empire’s rating fell to BB (high) from BBB, the agency said. “The negative trend reflects the challenges involved with reversing the declining profitability and cash flow at Sobeys,” DBRS said in a statement. “DBRS is also concerned with the high level of budgeted cap-ex and/or additional acquisitions that could result in further increases to debt for the consolidated group.”

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