NEW YORK — Moody's Investors Service here assigned a B3 rating to Tops Holding Corp.'s proposed $460 million senior secured notes due in 2017.
It also affirmed Tops' B3 corporate family and probability of default ratings and said it was maintaining a stable outlook.
Tops Holding is the parent of Tops Friendly Markets, Williiamsville, N.Y., which operates 146 corporate stores and five franchised stores in upstate New York,, northern Pennsylvania and Vermont. Morgan Stanley Capital Partners owns 71.6% of the company, with the balance held largely by Graycliff Partners and company management.
Proceeds from the proposed notes will be used to refinance Tops' existing senior secured notes; to fund a $100 million distribution to shareholders; and to pay related fees and expenses. The proposed notes will be guaranteed by all existing and future direct and indirect subsidiaries of Tops, Moody's said.
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It said the family rating of B3 reflects Tops' weak credit metrics, its modest size relative to competitors, its regional concentration and financial policies skewed toward shareholder returns, supported by its stable operating performance, its good regional market presence and its good liquidity. Moody's also said the stable outlook reflects the expectation that Tops' credit metrics will improve modestiy over the next 12 to 18 months due to increased profitability.
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