Moody’s revises CTI Foods to negative

Moody's Investors Service said it affirmed CTI Foods Holding Co., LLC's corporate family rating and probability of default rating at B3 and B3-PD, respectively, and changed the outlook to negative from stable.

As a result, the company's first- and second-lien term loans continue to be rated B3 and Caa2, respectively.

Moody’s said the affirmation of the B3 corporate family rating and outlook change primarily reflect the company's weak credit metrics as a result of lower than anticipated profitability, and the agency’s expectation that profitability will remain challenged for at least the next few quarters as the company attempts to strengthen its operating performance.

CTI's debt leverage was roughly 7.4 times for the 12 months ended March 25 (as measured by Moody's adjusted debt-to-EBITDA) while interest coverage for the same period as measured by Moody's adjusted EBITA-to-interest expense was roughly 1.2 times.

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