S&P assigns Fairway loans B-

Standard & Poor's said it assigned its B- corporate credit rating to Fairway Group Holdings Corp. and the co-borrower of its debt, Fairway Group Acquisition Co.

The outlook is stable.

At the same time, the agency assigned a B- issue rating to the company's $315 million senior secured credit facilities, consisting of a $275 million senior secured U.S. dollar tranche term loan and a $40 million revolver. A 3 recovery rating was assigned to the senior secured credit facilities to indicate an expectation that lenders would receive meaningful (50%-70%) recovery in the event of a payment default.

"The ratings on Fairway reflect Standard & Poor's view of the company's business risk profile as 'weak,' based on its small, but growing market share in the competitive and fragmented food retailing industry, geographic concentration of stores in the greater New York City metropolitan area, and very broad merchandise selection and a focus on perishables that helps it differentiate it from its competitors," S&P credit analyst Kristina Koltunicki said in a news release.

"It also incorporates our view that the company will continue on its high growth trajectory over the next few years."

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