S&P upgrades Tops, notes

S&P said it raised its corporate credit rating on Tops Holding II Corp. to CCC+ from SD and raised the issue-level rating on its senior unsecured notes due 2018 to CCC- from D.

The 6 recovery rating is unchanged, indicating an expectation for negligible (0%-10%; rounded estimate: 0%) recovery in the event of a payment default.

The outlook is negative.

Additionally, the agency affirmed its ratings on Tops Holding LLC, including the CCC+ corporate credit rating.

“The upgrade follows our reassessment of Tops' competitive position, liquidity, and capital structure, which we reviewed after the company completed its recent exchange offer,” S&P said in a news release.

The agency said the negative outlook reflects its expectations that operating performance will continue to be challenged by elevated competitive activity, pressuring store traffic and resulting in heightened promotional pricing, causing credit protection metrics to remain weak.

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