S&P cuts Del Monte loan recovery

S&P said it lowered its recovery rating for Del Monte Foods Inc.’s senior secured recovery rating to 4 from 3, indicating average (30%-50%; rounded estimate: 45%) recovery in default.

The lower recovery rating follows Del Monte launching a $100 million add-on to its outstanding $600 million term loan due in 2029.

The company intends to use the proceeds to repay a portion of the borrowings on its asset-based loan facility that it used to fund the Kitchen Basics acquisition in October 2022.

All the agency’s other ratings for Del Monte, including the B rating on the $600 million loan, are unaffected by this transaction, S&P said.

The outlook is positive.

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