Fitch Upgrades SUPERVALU to 'B-'; Rates New ABL & TL; Withdraws New Albertson's & American StoresLast update: 2/15/2013 11:02:00 AMCHICAGO, Feb 15, 2013 (BUSINESS WIRE) -- Fitch Ratings has upgraded its Issuer Default Rating (IDR) on SUPERVALU Inc. (SVU) to 'B-' from 'CCC'. Fitch has also assigned ratings of 'BB-/RR1' to SVU's new $900 million asset-based lending (ABL) facility and $1.5 billion secured term loan. The Rating Outlook is Stable. At the same time, Fitch has withdrawn its IDR and issue ratings on New Albertson's, Inc. and American Stores Company, LLC. A full rating list is shown below. These actions assume the successful completion of SVU's sale of its New Albertson's, Inc. business to AB Acquisition LLC, an affiliate of a Cerberus Capital Management-led consortium, with a closing expected in the first quarter of 2013. The upgrade reflects SVU's improved business mix, as the sale will reduce the company's exposure to the competitive traditional supermarket sector, and Fitch's expectation for relatively steady financial leverage at around the current level of 4.8x (as of Dec. 1, 2012). The ratings further reflect the company's weak operating trends, particularly within the independent business and Save-A-Lot segments, and the refinancing risk related to a sizable $1 billion senior note maturity in May 2016.
I am seeing a trend. Rating agencies upgrade, some big funds already stepped in and probably others will follow. Volume goes low since there is not enough float. Shorts have to suffer some pains and price may not and cannot stay this low.