Heritage Grocers Group LLC 's (HGG) cash flow and credit metrics have declined materially in 2024 due to a competitive promotional environment and pressure on consumers in its low-income markets. As a result, we expect S&P Global Ratings-adjusted leverage around 6x in 2024 and 2025. We revised the rating outlook On HGG to negative from stable and affirmed its 'B' issuer credit rating on HGG. At the same time, we affirmed our 'B' issue-level rating and '3' recovery rating to the proposed debt facilities. The '3' indicates our expectation of meaningful (50%-70%; rounded estimate: 60%) recovery in the event of a payment default. The negative outlook reflects the risks to our base case forecast due to the company?s elevated leverage
