Moody's ups Del Monte notes to B1

Moody's Investors Service said it upgraded the senior subordinated debt rating of Del Monte Corp. to B1 (LGD5, 80%) from B2 (LGD5, 85%), following the company's significant reduction in senior debt over the past year, as well as the company's speculative grade liquidity rating to SGL-2 from SGL-3.

The corporate family and probability-of-default ratings were affirmed at Ba3, and the senior secured revolving credit agreement and term loans were affirmed at Ba2 (LGD2, 28% from LGD3, 34%).

The outlook is stable.

Moody's said the upgrade of Del Monte's subordinated debt reflects the fact that there is a smaller amount of more senior debt in the capital structure.

The affirmation of Del Monte's long-term ratings incorporates expectation that internal cash flow generation will remain robust as the company's significant market positions allow it to pass along price increases to offset cost pressures, according to the agency.

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