S&P rates Tops notes B

Standard & Poor’s said it affirmed the B corporate credit rating on Tops Holding LLC and its parent, Tops Holding II Corp.

The agency also said it assigned a B rating to the new $550 million senior secured notes due in 2022. The issue-level rating is commensurate with a recovery rating of 4, indicating 30% to 50% expected default recovery.

S&P also said it affirmed the CCC+ rating on Tops II Holding’s unsecured notes estimated at $100 million, following pay down of $50 million as part of this transaction.

The recovery rating on these notes is 6, indicating 0% to 10% expected default recovery.

The outlook is stable.

The ratings reflect an expectation that the company will experience modest operational gains in the near term and relatively stable credit metrics, S&P said.

The company’s geographic concentration and participation in the very competitive food retail industry constrains the ratings, the agency said.

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