Roundy’s Supermarkets Inc. plans to borrow $150 million to pay a dividend to its owners, according to announcements Friday from two ratings agencies.
The new debt issue comes three years after Roundy’s Supermarkets Inc.’s owners had hoped to sell the company.
The Chicago owners of the Milwaukee-based grocery chain, Willis Stein & Partners, originally set a 2007 target for cashing out their investment, based on the equity firm’s strategy of holding properties for five years. But the firm didn’t find a buyer, and then the recession hit.
Moody’s Investors Services assigned a Caa-1 rating to the new debt and changed the company’s ratings outlook to negative from stable. But Standard & Poor’s revised its rating for Roundy’s to stable from negative. S&P assigned a CCC+ rating to the proposed $150 million debt, which will be a second-lien term loan.
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