Moody's rates Shearer's loan Ba3

Moody's Investors Service said it assigned a corporate family rating of B1 to Shearer's Foods, Inc. and rated its proposed $20 million senior secured revolver and $119 million term loan B facilities at Ba3 (LGD3, 40%).

The outlook is stable.

Proceeds will be used to fund Shearer's proposed acquisition of Snack Alliance and to repay existing debt at both companies.

Moody's said the B1 rating reflects the company's solid position in private label, co-pack and branded snack foods following the proposed acquisition of Snack Alliance, a transaction that will provide greater geographic, product and customer diversity to Shearer's as well as enabling costs synergies.

The rating also reflects the company's relatively small scale and focus on the salty snack sector, the agency noted.

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