S&P lowers Dean Foods

S&P said it downgraded the issuer credit rating on Dean Foods Co. to CCC+ from B- and removed the ratings from CreditWatch negative.

S&P also said it lowered the rating on the company's $700 million senior unsecured debt due in 2023 to CCC+. The recovery rating remains at 3.

The outlook is negative.

The company recently announced that it is exploring strategic alternatives, including asset sales, possible joint venture formations or sale of the company as it continues to face volume declines while operating profits remain distressed by higher labor, freight and transitory input costs, S&P said.

The company has refinanced its revolving credit facility and extended the maturity of its receivables purchase agreement by three years, the agency said.

But absent a turnaround, the company's financial commitments appear unsustainable in the longer term, S&P said.

The negative outlook reflects the potential for a lower rating over the next year if the company is unable to turnaround its business performance and maintain positive free cash flow, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.