Moody's changes Milk Specialties view to stable

Moody's Investors Service said it changed Milk Specialties Co.’s outlook to stable from negative and affirmed the company's corporate family rating at Caa1, probability of default rating at Caa2-PD and $32 million (down from $35 million) senior secured revolving credit facility due 2017 and $250 million senior secured first-lien term loan due 2018 at Caa1 (LGD3).

The agency said the stabilization of the outlook is largely the result of improvement in the company's liquidity profile, which was indirectly driven by the delivery of the company's fiscal 2014 5(12 months ended June 28, 2014) audited financial statements to the lender group and the receipt of an associated amendment. Liquidity improvement stems from the company's ability to access its revolver, which was prevented by a breach of covenants that existed prior to receipt of the amendment.

However, the liquidity improvement is partially offset by the permanent $3 million reduction in the revolver post-amendment, Moody’s said.

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