S&P may up A&P, Pathmark

Standard & Poor's said that while its ratings on both Great Atlantic & Pacific Tea Co. Inc. (A&P) and Pathmark Stores Inc., including the B- corporate credit ratings on both issuers, remain on CreditWatch with positive implications, where they were placed on Sept. 17, they will likely be raised by at least one notch to B following A&P's announcement.

According to S&P, A&P announced plans to sell its remaining 11.7 million shares of Metro Inc. stock and use the proceeds to reduce its overall pro forma debt levels and A&P plans to sell its shares prior to closing on the merger with Pathmark, expected to occur before the end of December.

The Metro shares were worth around $435 million as of Nov. 2, the agency noted.

Following the use of share sale proceeds to reduce the size of the bridge facility, A&P intends to finance the transaction with the reduced bridge loan facility and some borrowings under its $675 million ABL facility, the agency said.

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