ConAgra Foods could have a leverage ratio of 3.5x by the end of 2021

By Devika Patel

Knoxville, Tenn., Dec. 20 – ConAgra Foods Inc. reported a net debt leverage ratio of about 5x trailing 12 months’ pro forma EBITDA at the end of the last quarter, but the company believes it can get this number down to 3.5x by the end of 2021.

“We remain strongly committed to a solid investment-grade credit rating, and our target leverage ratio is 3.5x adjusted EBITDA, which we expect to reach by the end of fiscal year 2021,” executive vice president and chief financial officer David Marberger said on the company’s second quarter ended Nov. 25 earnings conference call on Thursday.

“There are no prepayment penalties on our variable rate term loans, which totaled $1.3 billion at the end of Q2, giving us flexibility to de-lever,” he said.

About 83% of the company’s debt was fixed rate at the end of the second quarter.

“At the end of the second quarter, our average debt maturity was approximately nine to 10 years and our weighted average coupon was approximately 4.7%,” he said.

Cash and cash equivalents were $442.3 million as of Nov. 25, compared to $128 million as of May 27.

As of the end of the second quarter, the company’s net debt was $11.1 billion.

ConAgra is a commercial and consumer foods company based in Omaha.

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