Moody's Turns Negative on C&S

SN STAFF

NEW YORK — Moody's Investor Service here said Tuesday it was affirming its ratings for C&S Group Enterprises, Keene, N.H., and was revising the wholesaler's outlook from stable to negative following the bankruptcy filing Sunday of A&P.

A&P is one of C&S Whole Grocers' largest customers, accounting for an estimated 20% of the company’s annual revenue, Moody's noted.

Moody's said it affirmed C&S' Ba3 corporate family and probability of default ratings and its B2 senior secured note rating based on its opinion that A&P's filing will not result in a material loss of revenue, cash flow or operating profit for the wholesaler in the near term. In addition, Moody's said it expects C&S to be a preferred vendor to A&P after it emerges from Chapter 11.

According to Moody's, the outlook revision from stable to negative acknowledges the longer-term uncertainty associated with the bankrupcty of one of the wholesaler's largest customers, particularly with respect to possible store closings, the renegotiation of the existing vendor contract and other possible actions A&P may take, Moody's said.