Moody’s assigns B1 to Fairway loans

Moody's Investors Service said it assigned a B1 rating to the $55 million super priority senior secured term loan (DIP term loan) and the $31 million super priority senior secured revolving credit facility available for issuance of letters of credit (DIP revolver) of Fairway Group Acquisition Co. as debtor-in-possession (DIP).

Both DIP credit facilities mature the earliest of (a) July 29, 2016; (b) the consummation of any sale of all or substantially all of the debtors' assets; (c) the acceleration of the DIP loans and the termination of the DIP commitments upon an event of default; and (d) the effective date of a prepackaged plan.

Revenues totaled $764 million for the LTM period ending Dec. 27, 2015. Moody's withdrew all previous ratings for Fairway on May 3.

The current ratings are being assigned on a point-in-time basis and will not be monitored going forward and therefore no outlook will be assigned.

Moody’s said the ratings reflect the size of the DIP facilities versus an estimated recovery value under either a reorganization or liquidation scenario. Other key considerations include: the structural features of the DIP facility, the nature of the bankruptcy and reorganization and the DIP size as a percentage of pre-petition debt.

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