Moody's downgrades High Liner Foods

Moody's Investors Service said it downgraded High Liner Foods Inc.'s corporate family rating to B2 from B1 and probability of default rating to B2-PD from B1-PD.

The agency also downgraded the rating on the company's $370 million senior secured first-lien term loan due 2021 to B3 (LGD 4) from B2 (LGD 4).

Moody's also said it affirmed High Liner's SGL-3 speculative grade liquidity rating.

The outlook remains stable.

The downgrades reflect expectations that High Liner's credit metrics will remain weak in the next 12- to 18-months due to headwinds from rising raw material prices, impact of U.S. tariffs and execution risks of its turnaround plans, Moody's said.

The ratings are constrained by the company's narrowly focused seafood processing operation, which is facing organic top line growth challenges driven by consumer shift toward fresh and healthy foods versus frozen and processed foods, the agency said.

The ratings also consider ongoing operational challenges and an expectation that leverage will be sustained around 6x in the next 12- to 18-months, Moody's said.

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