Moody's drops A&P

Moody's Investors Service said it downgraded the corporate family and probability of default ratings of the Great Atlantic and Pacific Tea Co. to Caa1 from B3, and downgraded the company's debt and preferred stock ratings.

The agency said that the ratings are on review for possible downgrade.

The speculative-grade liquidity rating remains SGL-2, Moody's noted, adding that the downgrades reflect greater than expected deterioration in A&P's top line and profit margins, as demonstrated by the third quarter operating results announced, as well as uncertainty about its ability to regain satisfactory operating and credit metrics in the near term.

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