U.S.-based, hard-discount grocer Moran Foods LLC (doing business as Save-A-Lot) has underperformed our expectations for a business turn around. We are lowering our ratings, including our issuer credit rating to 'CCC+' from 'B-'. The negative outlook reflects continued refinancing risk with a critical dependency on external lender support and consistent performance improvements to successfully support its capital structure. Overall, for the capital structure to be sustainable, we believe Moran will need to meaningfully improve its operating performance and prospects for profitability in the next 12 months. Moran's efforts to refinance its capital structure waited until the end of its store conversion when operating performance is expected to stabilize. The company's $150 million ABL, $60 million FILO (first-in-last-out) and first-lien debt
