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Moody’s Mulls Ingles Downgrade

NEW YORK — Moody's Investors Service here on Monday placed Ingles Markets’ ratings under review for possible downgrade, citing concern over financing for a warehouse expansion as well as margin pressure.

NEW YORK — Moody's Investors Service here on Monday placed Ingles Markets’ ratings under review for possible downgrade, citing concern over financing for a warehouse expansion as well as margin pressure.

Ingles, based in Asheville, N.C., said it would issue $99.7 million in Recovery Zone Facility bonds before the end of the year to finance the expansion of its distribution center as well as for eligible costs for store expansion.

Moody's said its review would focus on Ingles’ ability to sustain margins and cash flow that would enable it to meaningfully improve credit metrics in the near term.

“Given the company's moderate scale, geographic concentration, competition from alternative food retailers and continued economic weakness, margins could remain under pressure resulting in little or no improvement in credit metrics for an extended period,” Moody’s said in a statement. “Although the company's investment in new stores and store upgrades has been successful in helping customer retention, it has not led to meaningful margin expansion.”