NEW YORK — Standard & Poor’s here has lowered its ratings on A&P one notch to “CC” — its lowest rating above those for companies under regulatory supervision or default.
The rating indicates a “highly vulnerable” company that according to S&P “may be illiquid in the near term as a result of weak performance and its considerable near-term maturities.”
The ratings downgrade reflects weaker-than-expected financial results from A&P’s second quarter, which resulted in a greater drain of cash than was previously estimated, S&P said. A&P may not meet its financial obligations even with the help of a new loan or asset sales, the agency said.
“The ratings on A&P reflect our expectation that operating performance will be weaker in the near term and the company will continue to exhaust available liquidity,” Charles Pinson-Rise, a credit analyst for Standard & Poor’s, said in a statement. “We previously believed the operating performance could stabilize from this point forward, but we now currently anticipate that the negative sales could continue for the next two quarters, leading to further profit declines.”
A&P, Montvale, N.J., reported a loss of $153.7 million and a sales decline of 7.1% in the second quarter, which ended Sept. 11.