Moody’s drops Dean Foods facility

Moody's Investors Service said it affirmed Dean Foods Co.’s B1 corporate family rating and B2 (LGD 5) senior unsecured rating and lowered its senior secured bank credit facility rating to Ba3 (LGD 3) from Ba2 (LGD 2).

The agency also downgraded Dean Holding Co.’s senior unsecured debt rating to B3 (LGD 6) from B2 (LGD 5).

The outlook is stable.

Moody’s said the downgrade reflects a capital structure that now has a greater proportion of senior obligations due to a reduction of lower priority obligations. Pursuant to Moody's Loss Given Default methodology for speculative grade non-financial companies published June 2009, as senior obligations become a greater portion of the overall capital structure, their ratings will tend to approach the corporate family rating.

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