S&P lowers Tops Holding

S&P said it lowered its corporate credit rating on Tops Holding LLC to CCC from CCC+. The outlook is negative.

At the same time, S&P lowered the issue-level rating on the company's senior secured notes to CCC from CCC+. The 3 recovery rating is unchanged, indicating an expectation for meaningful (50% to 70%; rounded estimate: 60%) recovery in the event of default.

Additionally, S&P lowered the issue-level ratings on the company’s senior unsecured notes and Tops Holding II Corp.'s unsecured notes to CC from CCC-. The recovery rating on each issue remains 6, reflecting an expectation for negligible (0% to 10%; rounded estimate: 0%) recovery in the event of default.

“The downgrade reflects our view that challenging conditions in the U.S. food retail industry will continue to weigh on Tops' operating performance, pressuring the company's already thin credit protection metrics and increasing the potential for a debt restructuring,” S&P said in a news release.

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