Moody's upgrades KeHE

Moody's Investors Service said it upgraded KeHE Distributors, LLC's corporate family and probability of default ratings to Ba3 and Ba3-PD from B1 and B1-PD respectively. Moody's also upgraded the company's $200 million second-lien notes due 2026 to B2 from B3.

"The upgrade reflects operating performance that has exceeded Moody's expectations as demand for food at home has skyrocketed due to the coronavirus pandemic," said Mickey Chadha, a Moody's vice president, in a press release

"The increase in the top line and earnings will result in debt/EBITDA below 3x in the next 12 months and the upgrade also acknowledges Moody's expectation that KeHE will be able to maintain this improvement in credit metrics even after more normalized consumer shopping patterns return," Chadha added.

The outlook is stable.

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