NEW YORK - Moody's Investors Service on Tuesday said it has upgraded the debt of Tops Holding Corp., parent of the Tops Friendly Markets chain, citing the successful integration of the Penn Traffic acquisition.
As reported on Monday, Tops posted net income of $6.4 million for the recently ended third fiscal quarter, on a 3.6% gain in sales. The company said it is seeing strong gains at the 51 acquired Penn Traffic stores that have been converted to Tops.
"The business and execution risk associated with the Penn Traffic acquisition has been meaningfully reduced, and the integration has demonstrated positive results," said Mickey Chadha, senior analyst at Moody's. "The company has managed to maintain a good regional market presence in a challenging business environment despite larger competitors like Wal-Mart and Wegmans in its market area."
Moody's said it assigned a rating of B3, up from Caa1, to Tops' corporate family and probability of default, and also upgraded the rating to B3 from Caa1 of the Tops' $350 million in secured notes.