Moody's cuts Atlantic & Pacific

Moody's Investors Service said it downgraded the Great Atlantic & Pacific Tea Co., Inc.'s corporate family rating to Caa2 from Caa1.

Additionally, Moody's downgraded the company's probability of default rating to Caa2-PD from Caa1-PD and changed the outlook to negative.

The B3 rating on the $270 million first-lien senior secured term loan facility was affirmed.

"A&P's operating performance has been below our expectation with free cash flow generation and debt protection measures expected to be very weak," Moody's senior analyst Mickey Chadha said in a news release. "Despite management initiatives, reversing the company's brand erosion due to an extended period of underperformance will continue to be challenging in light of stiff competition and a sluggish economy."

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