Moody's affirms Bolthouse

Moody's Investors Service said it affirmed the B2 corporate family rating of Wm. Bolthouse Farms, Inc. and upgraded the probability of default rating to B2 from B3.

The upgrade of the probability of default rating reflects the company's progress in reducing debt to enhance covenant cushion, the agency said, adding that the rating on the company's second-lien term loan was also upgraded, to Caa1 from Caa2, as a result of significant repayments of first-lien debt.

The outlook remains negative.

Upgraded ratings also include the company's $135 million second-lien term loan due December 2013 to Caa1 (LGD5, 89%) from Caa2 (LGD5, 80%) while affirmed ratings include the company's $75 million first-lien revolving credit agreement expiring in December 2011 at B1; to LGD3/40% from LGD2/28% and $462 million (originally $500 million) first-lien term loan due December 2012 at B1; to LGD3/40% from LGD2/28%.

According to Moody's, the upgrade in the probability of default rating follows the application of free cash flow to debt reduction, which has allowed Bolthouse to comply with its leverage covenant, although cushion is still tight.

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