Moody’s moves Monogram view to negative

Moody’s Investors Service said it revised its outlook for Monogram Food Solutions LLC to negative from stable and affirmed its ratings, including the B2 rating on the company's senior secured first-lien revolving credit facility and senior secured first-lien term loan.

The negative outlook reflects an expectation that Monogram's operating performance in the next 12 to 18 months will be weaker than expected because of inflation and supply chain challenges, Moody’s said.

“In addition, free cash flow is likely to be negative over the next 12 to 18 months due to higher capital expenditures as management invests in building out its manufacturing capacity. Given the company's negative free cash flow, management has financed its manufacturing capacity growth through equipment lease financing which when combined with weaker EBITDA has resulted in an increase in the company's Moody's adjusted debt-to EBITDA leverage to 7x, which is high for the B2 credit profile,” the agency said in a press release.

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