Fitch rates Costco Wholesale notes A+

Fitch Ratings said it assigned an A+ rating to Costco Wholesale Corp.'s issuance of $1 billion four-year senior unsecured notes due 2021, $800 million five-year senior unsecured notes due 2022, $1 billion seven-year notes due 2024 and $1 billion 10-year notes due 2027.

The proceeds will be used to finance Costco's $7 per share around $3.1 billion special dividend, the agency said.

The notes rank pari passu with Costco's existing debt, Fitch said, and contain a change of control triggering event provision.

Costco's ratings reflect its top-three market position in North America food retailing with more than 700 high-volume warehouses that generate nearly $119 billion in revenue, industry-leading comparable sales, robust cash flow and low financial leverage, the agency said.

Total adjusted debt-to-EBITDAR was 1.2x for the latest 12 month period that ended Feb. 12, 2017, Fitch said.

The agency said it expects Costco's growing membership and high retention rates to support future sales and operating income growth.

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