S&P cuts 8th Avenue Food

S&P said it downgraded 8th Avenue Food & Provisions Inc. and the ratings on the $150 million secured revolving credit facility due in 2023 and $525 million first-lien term loan due in 2025 to B- from B. The agency also lowered the rating on the $100 million second-lien term loan to CCC from CCC+.

“The downgrade to B- reflects our view that leverage will remain elevated near 9x (pro forma for recent transactions) stemming from operational challenges that occurred in 2019. Leverage increased above 9.5x in 2019 largely driven by underperformance in the company's dry pasta segment. Manufacturing inefficiencies led to order fill rates falling below industry standards. In addition, the segment was hit with weather affecting supply chain routes,” said S&P in a press release.

The outlook is stable.

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