Moody's upgrades Windsor Quality Food, rates loans Ba3

Moody's Investors Service said it upgraded Windsor Quality Food Co. Ltd.'s corporate family and probability-of-default ratings to Ba3 from B1 and $75 million senior secured revolving credit facility due 2009, $45 million senior secured term loan A due 2009 and $100 million senior secured term loan B due 2010 to Ba2 (LGD3, 37%) from Ba3, (LGD3, 38%).

The agency also assigned provisional Ba3 ratings with loss-given-default assessments of LGD3 (37%) to the company's proposed $100 million senior secured revolving credit facility due 2011 and $160 million senior secured term loan due 2012.

The outlook is stable.

The proceeds from the new bank facilities will be used to refinance the company's existing $220 million senior secured bank facilities and retire its $85 million subordinated notes. Immediately thereafter, Moody's said it will likely lower Windsor's probability of default rating to reflect the change in debt capital structure to all secured bank debt.

The agency said the upgrade reflects Windsor's continued stable performance following the successful integration of Specialty Brands, Inc., including nearly $20 million in cost savings that have offset higher operating and commodity costs; positive sales growth trends driven by product expansion around the Jose Ole Mexican food platform and favorable demographics; and anticipated lower cost of capital under the new financing that should generate improved credit metrics and facilitate further debt reduction.

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