S&P rates Roundy's loan B

Standard & Poor's said it affirmed its ratings on Roundy's Supermarkets Inc., including the B- corporate credit rating. The outlook is stable.

S&P also assigned a B issue-level rating and 2 recovery rating to the company's proposed $460 million senior secured first-lien term loan. The 2 recovery rating indicates an expectation of substantial (70%-90%) recovery of principal in the event of default.

S&P said it expects the company to use term loan proceeds and funds from a new $220 million revolving credit facility to pay down its existing term loan and pay fees associated with the transaction. Concurrently, S&P said it expects the company to raise an additional $75 million in a secondary equity offering.

"The affirmation reflects our view that the expected refinancing will not affect the company's financial risk profile materially, as the company is only mildly increasing funded debt, while slightly lowering interest costs and improving its financial flexibility," said S&P credit analyst Charles Pinson-Rose in a news release.

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