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Standard & Poor's revised its outlook for the Penn Traffic Co., which owns Quality Markets, to positive from stable.

At the same time, the credit-rating agency affirmed its "B " corporate credit, "B-" senior unsecured debt and "BB-" senior secured bank loan ratings on the Syracuse-based company.

The outlook revision is based on Penn Traffic's sustained operating improvement since it emerged from bankruptcy in 1999. Improved customer service and reduced costs have increased same store sales in recent quarters and earnings before interest, taxes, depreciation and amortization are 2.3 times its debt.

Standard & Poor's said the ratings could be raised during the next 12 months if the company continues to demonstrate improved operations and satisfactory financial flexibility.

The Penn Traffic Co. operates 220 supermarkets in Ohio, West Virginia, Pennsylvania, upstate New York, Vermont and New Hampshire under the names of Big Bear, Big Bear Plus, Bi-Lo, P&C and Quality. Locally, the company operates seven Quality Markets in the Buffalo Niagara area that employ about 500 people.

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