Moody's rates Milk Specialties loan B2

Moody's Investors Service said it assigned a B2 rating to Milk Specialties Co.'s extended first-lien term loan due 2025. Milk Specialties' B2 corporate family rating, its B2-PD probability of default rating and the B2 rating on its revolving credit facility maturing in August 2023 remain unchanged.

Milk Specialties plans to upsize its first-lien term loan to $519 million from $439 million and extend the maturity date to August 2025 from August 2023. Milk Specialties will also issue an unrated $100 million second-lien term loan.

The proceeds and cash on hand will be used to pay a one-time shareholder distribution and cover transaction fees.

"Despite an increase in leverage through the issuance of additional debt to fund a distribution to the shareholders, Milk Specialties' B2 CFR remains unchanged as a result of the company's improved operating results and its strong market positions in the human and animal nutrition segments," said Louis Ko, a Moody’s vice president and senior analyst, in a press release.

The outlook remains stable.

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