Moody's changes Biscuit view to stable

Moody's Investors Service said it changed the outlook on Cookie Intermediate Holding II SAS (Biscuit), Biscuit Holding SAS and De Banketgroep Holding International BV to stable from negative.

The agency affirmed the Caa1 corporate family rating and the Caa1-PD probability of default rating of Biscuit, the parent company of Biscuit Holding. Concurrently, Moody's affirmed the B3 ratings on the €493.8 million senior secured first-lien term loan B due 2027 and the €85 million senior secured multicurrency revolving credit facility due 2026 borrowed by Biscuit Holding and the B3 rating on the €201.2 million senior secured first-lien term loan B due 2027 borrowed by De Banketgroep.

"The outlook change to stable from negative reflects Biscuit's improvement in operating performance due to the full implementation of price increase, which led to a recovery in contribution margin and profitability during the first half of 2023. Moody's expects earnings growth to be sustained through year-end 2023, driving deleveraging progress, though with debt/EBITDA remaining very high at around 9.5x with potential for reduction to a more sustainable level only in 2024," said Valentino Balletta, a Moody's analyst and lead analyst for Biscuit, in a statement.

"The rating action also reflects the company's improved liquidity following the completion of its sale-leaseback and the issuance of additional debt, that, while structurally increasing leverage, provided additional liquidity to cope with the peak in its working capital needs," Balletta added.

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