Moody's affirms Del Monte

Moody's Investors Service said affirmed the Ba3 ratings on Del Monte Corp.'s senior secured credit facilities, the B2 rating on its senior subordinated notes, its Ba3 corporate family rating and its SGL-2 speculative grade liquidity rating.

Moody's noted it also changed the outlook on all ratings to stable from positive.

The affirmation of ratings and change in outlook follows the company's announcement that it will acquire the Meow Mix Co. for about $705 million in cash, as well as divest its private label soup and infant feeding business for about $268 million in cash.

While Moody's said it views the acquisition as making strategic sense and being a good fit with the company's other pet food businesses, the increased leverage and integration risk, combined with the recent adoption of more aggressive financial policies, make an upgrade in the near to intermediate term less likely.

However, Del Monte's solid track record of integrating acquisitions, its expected post-acquisition financial profile and Moody's expectation that the company will work to reduce acquisition debt in the year ahead, justifies the affirmation of the company's ratings at existing levels, the agency said.

Affirmed ratings include the company's $350 million senior secured revolving credit expiring 2011 at Ba3, $450 million senior secured term loan A due 2011 at Ba3, $149.2 million senior secured term loan B due 2012 at Ba3, $250 million senior subordinated notes due 2015 at B2 and $450 million senior subordinated notes due 2012 at B2.

© 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.