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Moody’s reviews TreeHouse
Moody's Investors Service said it placed TreeHouse Foods, Inc.’s Ba2 corporate family rating, Ba2-PD probability of default rating, Ba2 senior unsecured bank facility ratings and Ba2 senior unsecured note ratings under review for downgrade.
The speculative grade liquidity rating was downgraded to SGL-3 from SGL-2.
Moody’s said the review reflects the high financial leverage that TreeHouse has sustained since it acquired Private Brands from ConAgra Foods in early 2016.
“The review also reflects Moody's expectation that leverage is likely to rise further this year due to heavy spending on restructuring activities and soft operating performance,” the agency said in a news release.
“Moody's previously stated that if debt/EBITDA is not likely to be near 4.0 times by the end of 2018, a downgrade could occur. As of March 2018, the company's Moody's adjusted debt/EBITDA rose to 4.9x from 4.4x at the end of 2017, and likely will exceed 5.5x by year end.”
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