Moody's puts Pathmark on review

Moody's Investors Service said it placed Pathmark Stores, Inc.'s Caa1 corporate family and probability-of- default ratings and Caa2 (LGD5, 76%) $350 million guaranteed 8¾% senior subordinated notes due 2012 on review, direction uncertain, following the company's announcement that it agreed to be acquired by The Great Atlantic & Pacific Tea Co. for $1.3 billion in cash, stock and debt assumption and retirement.

The agency said the uncertain direction of the review reflects the possibility that Pathmark's ratings could be raised depending on the credit profile of the combined entity and the position of the Pathmark debt in the resulting capital structure, as well as the risk that Pathmark's operating performance could deteriorate during the interim period prior to the closing of the merger.

The review will primarily focus on the resulting capital structure of the combined company, the interim operating performance of Pathmark prior to the completion of the merger, its financial policy and liquidity profile and an evaluation of potential synergies.

© 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.