Fitch: BBB to Flowers Foods notes

Fitch Ratings said it assigned a BBB rating to Flowers Foods, Inc.’s new $300 million senior unsecured notes due Oct. 1, 2026.

Net proceeds will be used to repay outstanding debt and for general corporate purposes.

The notes rank equally with all of Flowers' existing and future senior unsecured debt and include standard protection for bondholders including a change-of-control triggering event provision.

Flowers' ratings reflect its position as the second largest producer of baked goods in the U.S., behind Grupo Bimbo, SAB de CV (BBB/stable), with annual revenue of $3.8 billion in 2015, the agency said.

Flowers has a strong portfolio of brands including Nature's Own, Wonder, Tastykake, and Mrs. Freshley's.

Contiguous geographic expansion and bolt-on acquisitions have enabled the company to grow sales and increase market share in a mature, highly competitive, and consolidating industry. Flowers' geographic footprint reaches about 85% of the U.S. population, and its share in branded fresh packaged breads has steadily increased to 14.9% in 2015 from 10.7% in 2011, despite periods of promotional intensity in the industry, Fitch added.

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