Moody’s rates Del Monte notes Caa2

Moody's Investors Service said it affirmed Del Monte Foods, Inc.'s corporate family rating at Caa1 and probability of default rating at Caa1-PD.

Moody's also assigned a Caa2 rating to proposed $575 million seven-year senior secured notes currently being offered.

Moody's upgraded the company's speculative grade liquidity rating to SGL-3 from SGL-4 and revised the outlook for all ratings to positive from stable.

The secured note offering is part of a recapitalization that will result in the full repayment of Del Monte's first-lien secured term loan (Caa1) and second-lien secured term loan (Caa3). The ratings on these secured term loan instruments will be withdrawn when the loans are repaid, anticipated at closing, Moody’s said.

“The Caa1 corporate family rating reflects Del Monte's high financial leverage, declining category sales volume in U.S. canned fruit and vegetables, and high execution risk related to a major operational restructuring underway,” the agency said in a news release.

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