S&P nips Monogram Food

S&P said it downgraded its ratings for Monogram Food Solutions LLC and its senior secured facilities to B- from B. The recovery rating remains 3, indicating meaningful (50%-70%; rounded estimate: 60%) recovery in default.

“The downgrade reflects weaker-than-expected operating results primarily due to staffing challenges and shortages in key ingredients and packaging materials. Monogram's EBITDA came in below our expectations as the company battled labor constraints earlier during the year and more recently, shortages in packaging materials and key ingredients such as starch.

We understand that the labor constraints have mostly been resolved, with staffing levels improving to about 95% capacity in its production facilities. However, packing material and ingredient shortages are expected to persist over the rest of the year, resulting in margins remaining pressured,” S&P said in a press release.

The agency said it now estimates Monogram’s leverage will climb to 7.7x in 2022 compared with the previous expectation of about 5.3x and will remain at or above 7x in 2023.

The outlook is stable.

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