NEW YORK — Citing the possibility of increasing competition, Moody's Investors Service here said Wednesday it has changed the ratings outlook for Roundy's Supermarkets, Milwaukee, to negative from stable.

At the same time Moody's affirmed the company's B2 corporate family rating; its B3-PD probability of default rating; and the B1 rating of the company's $125 million first lien revolving credit facility and its $667 million first lien term loan.


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According to Moody's, "We expect increasing competition in Roundy's core markets to continue to pressure its top line and margins in the next 12 months. This could cause further deterioration in the company's financial leverage, which is already weak for the B2 rating category."

The negative outlook also reflects the uncertainty regarding the company's ability to improve operating performance and credit metrics to levels consistent with the B2 rating category in the next 12 months, Moody's added; and it acknowledges that the challenging operating environment will likely limit Roundy's profit and cash flow improvement in the foreseeable future.

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