Moody's ups Dole Food, rates loan Ba2

Moody's Investors Service said it upgraded Dole Food Co. Inc.'s corporate family rating to B1 from B2 and assigned Ba2 ratings to the company's proposed senior secured term loan facilities, along with a speculative grade liquidity rating of SGL-2. Its senior unsecured debentures are now rated B3; LGD 5 (87%) from Caa1 LGD 5 (86%) and its $250 million term loan B is rated Ba2 (LGD2, 23%). Sovest Ltd.'s $600 million term loan C is rated at Ba2 (LGD 2, 23%).

The outlook is stable.

Proceeds from the new facilities will be used to repay the exiting term loans B and C as well as the $70 million balance remaining on the notes due 2011, Moody's said.

The upgrade was prompted by continued improvement in operating performance and financial metrics, a vastly improved debt maturity schedule and management's commitment to and execution of leverage reduction, the agency said.

The ratings also incorporate the company's earnings and cash flow volatility from its exposure to commodity markets, Moody's said, as well as the impact of such uncontrollable factors as weather or political regulations on key products.

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