NEW YORK — Moody’s Investors Service on Wednesday said it affirmed its B2 rating on Bi-Lo and assigned a B3 rating to $140 million in new debt to be used to pay its owner Lone Star Funds.
Moody’s said the ratings acknowledge an “aggressive” debt posture but also reflect that Bi-Lo has continued to execute effectively, including improved performance at Winn-Dixie Stores, which it acquired earlier this year.
“The integration of Winn-Dixie is proceeding as planned resulting in improved operating performance of the combined company and sufficient cushion for the incremental debt within the B2 rating category," Mickey Chadha, senior analyst at Moody’s, said in a statement.
More news: Bi-Lo Selects Pricing System for Winn-Dixie
Moody’s defines “B” ratings as “speculative and subject to high credit risk.” A B2 rating is considered more speculative than B3. The new notes due in 2019 and will help to fund $305 million in cash distributions to Lone Star, funded mainly by debt including an existing $285 million in 2019 notes, Moody’s said
Bi-Lo, based in Jacksonville, Fla., operates 687 supermarkets in eight Southeast states.
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