Moody’s assigns A3 to Sysco notes

Moody's Investors Service said it assigned an A3 rating to Sysco Corp.’s proposed $1 billion senior unsecured notes offering.

Sysco’s ratings also include an A3 senior unsecured rating and Prime-2 short-term commercial paper rating.

The outlook is stable.

Proceeds will be used to refinance existing debt, fund a tender offer and general corporate purposes.

“Sysco benefits from its market-leading position in the U.S., with revenues that are almost twice those of its nearest competitor, successful de-leveraging that has led to an improved quantitative profile, robust liquidity, and the positive impact of the Brakes acquisition,” Moody’s said in a news release.

“These strengths are balanced by the risks inherent in its acquisition-based growth model, especially as it is now in Europe, with Brakes to function as a platform for future acquisition-fueled growth.

“In addition, this view considers Sysco's aggressive financial policy.”

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