Moody’s upgraded Allied Supermarkets’ rating.

The rating agency upgraded to B1 from B2 the rating on $125 million of outstanding debt of the Detroit-based company, which later this summer is expected to merge with Vons Cos. and take that company’s name. At the same time, Moody’s assigned a B1 rating to $240 million of proposed senior subordinated and subordinated debt. In issuing the ratings, Moody’s cited “the high leverage, strong Southern California market position and potential for improved earnings that Allied will have” after the merger.