Moody's lifts Keurig view to positive

Moody's Investors Service said it revised Keurig Green Mountain, Inc.'s outlook to positive from stable.

The agency also said it affirmed all of Keurig's existing ratings, including its Ba2 corporate family rating, Ba3-PD probability of default rating and Ba2 ratings on its senior secured bank credit facilities.

The positive outlook reflects the improvement in Keurig's debt-to-EBITDA ratio to 3.1x at the end of this fiscal year from 4.8x last year, Moody's said.

Over the past 18 months, Keurig has repaid $2 billion of the $6 billion of acquisition debt incurred as part of the March 2016 leveraged buyout by JAB Holdings, the agency added.

The company's EBITDA also has improved by 10% through increased productivity and rising brewer household penetration that has driven increased pod sales, Moody's said.

These improvements have more than offset declines in coffee pod prices that have been pressured by increased competition, especially from unlicensed coffee pod manufacturers, the agency noted.

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