Moody's upgrades Flowers Foods

Moody's Investors Service said it upgraded Flowers Foods, Inc.'s senior unsecured debt rating and $250 million revolving loan facility due 2012 to Baa2 from Baa3.

This concludes the rating review that began on Jan. 17, and the outlook is stable.

The agency said the upgrade is based on Flowers' continued stable operating performance, conservative financial policy, measured territory expansion and strong debt protection measures. The rating also reflects Flowers' success in growing operating margins and earnings against rising input costs through a combination of improved operating efficiency, positive product mix shift, effective commodity hedging and pricing actions.

The stable outlook reflects Moody's belief that Flowers should be able to sustain reasonably stable operating performance in spite of increasing commodity costs.

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