Moody's rates Green Mountain Coffee, loan Ba3

Moody's Investors Service said it assigned definitive ratings to Green Mountain Coffee Roasters, Inc., including a Ba3 corporate family rating and B1 probability of default rating, following the closing of the company's first-time rated debt on Dec. 17.

Moody's also said it assigned a Ba3 rating to the company's new $1.45 billion senior secured bank facility, the proceeds from which the company used to fund the simultaneous closing of its C$915 million acquisition of LJVH Holdings, Inc., also known as Van Houtte.

The agency also affirmed the company's SGL-3 speculative grade liquidity rating.

The outlook is stable.

The ratings reflect the expanding base and growing retail acceptance of Green Mountain's category-leading Keurig single-serve coffee brewers, which drive sales of its high-margin K-Cup coffee cartridges, Moody's said.

The rating also reflects the company's aggressive growth strategy that has involved the rapid consolidation of K-Cup licensees over the past two years in four separate transactions valued at $1.4 billion, the agency said.

Elevated leverage resulting from acquisitions is mitigated by the incremental high operating profit margins generated by the acquired companies and by the $637 million of equity raised to partially fund them, Moody's added.

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