Research Update: C&S Wholesale Grocers Downgraded To 'B+' On Announced Nonrenewal Of Contracts With Key Client, Ratings On Watch Negative

Keene, N.H.-based distributor C&S Wholesale Grocers Inc. announced that it is planning to amend the terms of its existing supply agreements to Ahold Delhaize USA. Ahold--C&S' top customer--will be transitioning to a self-distribution network and will not renew its contracts with the company after they expire over the next three years. We are lowering our issuer credit rating on C&S to 'B+' from 'BB-'. At the same time, we are lowering our issue-level rating on the company's revolver to 'BB' from 'BB+' and our issue-level rating on its senior notes due 2022 to 'BB-' from 'BB'. Subsequently, we are placing all of our ratings on C&S on CreditWatch with negative implications. Our recovery ratings on the company's debt remain unchanged

...- Keene, N.H.-based distributor C&S Wholesale Grocers Inc. announced that it is planning to amend the terms of its existing supply agreements to Ahold Delhaize USA. Ahold--C&S' top customer--will be transitioning to a self-distribution network and will not renew its contracts with the company after they expire over the next three years. - We are lowering our issuer credit rating on C&S to 'B+' from '##-'. At the same time, we are lowering our issue-level rating on the company's revolver to '##' from '##+' and our issue-level rating on its senior notes due 2022 to '##-' from '##'. Subsequently, we are placing all of our ratings on C&S on CreditWatch with negative implications. - Our recovery ratings on the company's debt remain unchanged and we will reassess them when we resolve the CreditWatch listing. - Ahold currently accounts for approximately 40% of C&S' net sales and we expect the reduction in the company's volumes and earnings following the expiration of the supply agreements to negatively...

Research Update