Moody's rates Heinz buyout debt Ba2, B1, B2

Moody's Investors Service said it assigned a Ba3 corporate family rating and Ba3-PD probability of default rating to Hawk Acquisition Sub, Inc.

The agency also assigned a provisional Ba2 rating to Hawk's proposed $10.5 billion of senior secured first-lien bank facilities, a provisional B1 rating to its proposed $2.1 billion of senior secured second-lien notes and a provisional B2 rating to its proposed $900 million of senior notes. The outlook is stable.

Hawk is a newly formed entity that will facilitate the pending leveraged acquisition of H.J. Heinz Co. (Baa2) by Berkshire Hathaway, Inc. and 3G Capital. The ratings of Heinz remain under review for downgrade.

The agency said Hawk's Ba3 corporate family rating reflects the high financial leverage that will result from the buyout with 6.3 times debt/EBITDA anticipated on a reported basis and about 10 times debt/EBITDA including $8 billion of preferred stock.

Moody's said the rating also takes into consideration Heinz's strong global franchise and its attractive future growth opportunities in emerging markets, and the agency expects that new and ongoing cost savings initiatives under the new ownership will be a key driver of earnings growth and financial deleveraging.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.