DJ Pathmark Debt Ratings Lowered By S&P;Outlook Negative
03/23/2000
NEW YORK (Dow Jones)--Standard & Poor's said it lowered its corporate credit rating on Pathmark Stores Inc. to double-C from triple-C-plus, its subordinated debt rating to single-C from triple-C-minus, and its bank loan rating to triple-C from single-B-minus.
The rating agency said the rating outlook is negative.
The ratings downgrade follows Pathmark's announcement that it has formed an ad hoc committee with its bondholders in an effort to develop a consensual plan to restructure its bond debt and the preferred stock of Supermarkets General Holding Corp., its parent company, S&P said.
Pathmark has a $50 million sinking fund payment obligation due on June 15, 2000, relating to the company's $200 million subordinated notes due in 2002. If Pathmark elects to satisfy this obligation, S&P believes the company would further reduce its already weak liquidity position and would have difficulty refinancing $370 million of debt maturities in 2001. Pathmark has about $70 million available under its $200 million revolving credit facility.
S&P believes Pathmark still maintains good market positions as a leading supermarket operator in the New York, New Jersey, and Philadelphia market area.
The rating on Pathmark's bank loan anticipates that the company would retain sufficient value either as a business enterprise or through the value of its discreet assets to pay off the bank loan in full in the event of a default, the rating agency said.
S&P believes the company will have difficulty satisfying future debt maturities, which could result in a default within the next six months. |
