S&P upgrades Tops

Standard & Poor's said it raised Tops Holdings Corp.'s corporate credit rating to B+ from B, along with the company's senior secured second-lien notes to B+ from B.

The recovery rating on the notes remains a 3, indicating 50% to 70% expected recovery in a default.

The outlook is stable.

The upgrade primarily reflects a revised view of the company's financial risk profile as aggressive from highly leveraged, S&P said.

This change follows better-than-expected profit growth in 2011 as a result of better operating margins following the integration of Penn Traffic stores in 2010, the agency said.

It also incorporates an expectation that Tops will maintain 2011 operating margins and modestly grow revenue and profits in 2012, S&P said.

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