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How Tops' debt grew and grew and grew

Too much debt and soft sales pushed the owner of Tops Markets into Chapter 11 bankruptcy.

Here's how the supermarket chain came to be saddled with $724 million in debt. Nearly half of the debt was used to pay nearly $350 million in dividends to its owner at the time, Morgan Stanley Private Equity.

2007: Morgan Stanley Private Equity buys Tops from Ahold for about $300 million. To finance the deal, Morgan Stanley takes out $200 million in loans.

Total debt: $200 million

2009: Morgan Stanley sells $275 million in debt. It uses that money to pay down some of its loans and pays itself $105 million in dividends.

Total debt: $275 million

2010: Tops issues $75 million in new debt to help pay for stores it acquired from Penn Traffic Corp.

Total debt: $350 million

2012: Tops issues $460 million in new debt to repay the notes it issued in 2009 and 2010, plus pay a $100 million dividend to Morgan Stanley.

Total debt: $460 million.

2013: Tops, seven months before the management buyout,  issues $150 million in new debt and uses nearly all of it to pay $142 million in dividends to Morgan Stanley. In addition, Tops borrowed $14 million on its credit line in October 2009. By the time the supermarket's management bought the company in December 2013, borrowings under that credit line had grown to $55 million.

Total debt: $665 million.

2017: Total debt was $724 million.


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