Moody's gives Roundy's loan B1

Moody's Investors Service said it assigned a B1 rating to Roundy's Supermarkets, Inc.'s proposed $460 million first-lien term loan.

The agency also affirmed the company's B2 corporate family rating, B2-PD probability of default rating and all the existing instrument ratings.

The outlook remains negative.

Proceeds from the term loan will be used to refinance the company's existing senior secured term loan. As part of the refinancing transaction, the company will also replace its $125 million senior secured revolving credit facility with a proposed $220 million ABL revolving credit facility.

Moody's said the proposed refinancing of the existing credit facilities is modestly positive as it marginally improves liquidity while extending maturities. While the agency believes the Dominick's acquisition makes strategic sense, it noted that Roundy's will be integrating this acquisition while at the same time experiencing challenges in its core business, which increases the overall risk profile for the company over the intermediate-term.

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