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Moody's cuts Bumble Bee, Clover Leaf to B1
Moody's Investors Service said it lowered the debt ratings of Bumble Bee Foods, LLC and Clover Leaf Seafoods, LP and placed them on review for possible further downgrade. Bumble Bee and Clover Leaf are core operating subsidiaries of the Connors Brothers Income Fund.
The ratings affected include Bumble Bee and Clover Leaf's corporate family rating to B1 from Ba3, probability of default rating to B2 from B1, $75 million five-year senior secured revolving credit to B1 from Ba3, $200 million six-year senior secured revolving credit to B1 from Ba3 and speculative grade liquidity rating to SGL-4 from SGL-2.
The downgrade was prompted by the weakened liquidity stemming from news that Connor Brothers will recognize a $35 million charge in the second quarter ended June 30. The charge reflects estimated costs of a voluntary recall of certain canned meat products due to two potential botulism incidents, the agency said.
The review will focus on the companies' ability to secure a waiver and amendment to its credit facilities, the timing of cash demands related to the recall and the potential offset from other cash flow sources, Moody's said.
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