Fitch: Del Monte unaffected

Fitch Ratings said Del Monte Foods Co.'s BB long-term issuer default rating remains unchanged following the company's announcement that it is exploring strategic alternatives for its StarKist tuna seafood operations. Del Monte Corp.'s BB long-term issuer default rating, BB+ senior secured bank facility and BB- senior subordinated notes also remain unchanged.

The outlook is stable.

Del Monte has not disclosed the timing of any sale nor the amount or use of potential proceeds.

Given the lower margin commodity nature of the branded tuna business and ongoing input cost pressure, the agency said it views a review of strategic options for this business positively. The sale of StarKist could reduce working capital requirements and lessen cash flow volatility. Using a substantial portion of proceeds for debt reduction could help strengthen Del Monte's ratings, Fitch said, while significant incremental share repurchases or acquisitions could be negative for the rating.

For the last 12 months ended Jan. 27, the total debt-to-operating EBITDA ratio was 4.7 times.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.