S&P rates Northeast Grocery, loan B+

S&P said it assigned B+ ratings to Northeast Grocery Inc. and its planned $550 million five-year senior secured term loan facility. The outlook is negative.

“Our rating reflects Northeast Grocery's limited operating scale, regional concentration, and higher focus on suburban and rural communities. Northeast Grocery was formed from the 2021 merger between Tops Markets Corp. and The Golub Corp. We believe the grocery market has become increasingly competitive in recent years. Northeast Grocery has a leading position within its markets; however, its store fleet is heavily concentrated in New York, with a smaller presence in surrounding states.

“We believe the company will remain concentrated in its existing markets, where we expect low population growth in the future,” the agency said in a press release.

Northeast will use the loan to refinance its existing first- and second-lien term loans. The company's asset-based lending facilities will remain in place.

“The negative outlook reflects the risk that the company will experience persistently weaker free cash flow generation than our base case given headwinds in the first half of fiscal 2024 and that S&P Global Ratings-adjusted debt to EBITDA could deteriorate to 4.5x or higher against our base case of about 4x next year,” S&P said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.