S&P rates A&P loans BB+, BB-

Standard & Poor's said it assigned ratings to Great Atlantic & Pacific Tea Co. Inc.'s $800 million debtor-in-possession credit facility and kept its corporate credit rating at D.

A&P's $450 million first-out revolving credit facility was rated BB+ and its $350 million second-out term loan due June 2012 was rated BB-.

A&P filed a voluntary petition under Chapter 11 of the Bankruptcy Code on Dec. 13, according to the agency.

"The rating reflects our view of the likelihood of repayment of the DIP loans in full upon the company's reorganization and emergence from bankruptcy, as well as our assessment of lenders' prospect for full recovery of principal in the event that liquidation becomes necessary," S&P analyst Ana Lai said in a statement.

"We believe that A&P remains a viable business and the company's likely reorganization and emergence from bankruptcy are supported by its good market position as a supermarket operator in the New York and New Jersey metropolitan areas, as well as prospects for meaningfully reducing its high cost structure in bankruptcy (through lease rejections, supply agreement and labor negotiations), and our belief that it should have sufficient liquidity to complete necessary restructuring actions," Lai added.

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