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BRUSSELS, Belgium -- International food retailer Delhaize Group said yesterday it has begun implementing cross-guarantees between Delhaize Group SA and Delhaize America, Inc., its largest subsidiary and the parent company of Food Lion, Hannaford Bros., and Sweetbay Supermarkets, to help increase its financial flexibility.
"The implementation of cross-guarantees will improve Delhaize Group's access to the capital markets and increase our financial flexibility," explained Delhaize Group president and c.e.o. Pierre-Olivier Beckers.
Delhaize Group and Delhaize America, along with substantially all of Delhaize America's subsidiaries, now guarantee each other's existing and future unsubordinated financial debt obligations. All senior and unsecured debt at Delhaize Group and Delhaize America now rank pari passu.
The implementation of cross-guarantees was conditional upon Delhaize Group obtaining a credit rating from Moody's and S&P at least as strong as the last credit rating and outlook of Delhaize America. On May 14, Moody's gave Delhaize Group an investment grade rating of Baa3 (with a stable outlook), and S&P gave a BB+ rating (with a positive outlook) to Delhaize Group.
Delhaize Group will now be the rated entity instead of Delhaize America.