Moody's rates Stater Bros. loans B1

Moody's Investors Service said it affirmed Stater Bros. Holdings Inc.'s corporate family rating at B2 and its probability of default rating at B2-PD.

The agency also assigned a B1 rating to Stater Bros. Markets' proposed $150 million revolving credit facility, its proposed $275 million term loan A and its proposed $300 million term loan B.

In addition, Moody's upgraded Stater's speculative grade liquidity rating to SGL-1 from SGL-2 and changed the outlook to stable from negative.

Upon closing of the transaction, the corporate family rating, probability of default rating and speculative grade liquidity rating will be moved from Stater Bros. Holdings Inc. to Stater Bros. Markets.

Proceeds from the proposed credit facilities along with balance sheet cash will be used to repay approximately $616 million of outstanding borrowings under the company's existing senior notes and term loan.

Moody's said the B1 rating on the secured bank facilities reflects the senior position the credit facilities represent within the company's liability structure and the significant amount of liabilities - predominantly lease rejection claims and multi-employer pension liabilities - that are subordinated to these facilities.

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