Moody's: Roundy's loans B1

Moody's Investors Service said it assigned a provisional rating of B1 to Roundy's Supermarkets Inc.'s proposed $125 million first-lien revolving credit facility and proposed $675 million first-lien term loan.

The proposed credit facilities will refinance the existing debt concurrently with a planned initial public offering in February 2012.

The proceeds are expected to partially be used to repay Roundy's existing debt.

Moody's also said it affirmed the company's B2 corporate family and probability of default ratings with a negative outlook.

Moody's also affirmed the B1 rating on the company's $95 million revolver and $634 million first-lien term loan and the Caa1 rating on its $150 million second-lien term loan.

Given the change in the proposed capital structure, Roundy's probability of default rating could likely be lowered to B3 consistent with Moody's methodology.

The outlook also is likely to be stabilized if refinancing is consummated as proposed, reflecting an improvement in liquidity, the agency said.

The ratings reflect the company's high leverage, small size, geographic concentration, weak liquidity and financial policies skewed toward shareholder returns, Moody's said.

The ratings also consider Roundy's good regional presence, relatively stable operating performance in a stressed operating environment and adequate liquidity, the agency said.

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