Moody's rates Dean Foods notes B2

Moody's Investors Service said it assigned a B2 rating to Dean Foods' $400 million senior unsecured notes eight-year notes, and affirmed its Ba3 corporate family rating and SGL-3 rating.

The outlook remains negative.

The ratings are supported by the company's leading market share and national scale in the U.S. dairy industry, the potential for further cost efficiencies and productivity improvements and its strong distribution network with comprehensive refrigerated direct-store delivery systems, the agency said.

These positives are offset by very narrow margins inherent in its largest, commodity-oriented milk business, more limited product, geographic and customer diversification than certain other large global food and agriculture companies and the potential for both volatility in milk prices and shifts in the pricing strategies of retailers, Moody's said.

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