Moody’s rates Shearer's loan B1

Moody's Investors Service said it assigned a B1 rating to Shearer's Foods, LLC's proposed $225 million incremental term loan and revised the outlook to stable from negative.

The B2 corporate family rating was affirmed.

Shearer's Foods announced that it will issue $225 million of incremental first-lien term loan debt, a $42.5 million subordinated holding company sellers note and an undisclosed amount of new equity to fund the previously announced acquisition of the Barrel O' Fun businesses from KLN Enterprises, Inc. Shearer's will also increase its ABL revolving credit facility to $125 million from $75 million.

The B2 corporate family rating reflects the company's high degree of financial leverage, significant customer concentration, relatively small scale, and low profitability, Moody’s said. These negative credit factors are somewhat offset by the company's leading position as a producer of private label chips and crackers and cookies. The rating also reflects Shearer's good liquidity.

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