Moody’s rates Iceland Foods notes B1, on review

Moody's Investors Service said it assigned a provisional B1 rating to the senior secured notes to be issued by Stretford 79 plc, a wholly owned subsidiary of Iceland VLNCo Ltd. (Iceland Foods Group or the company), with a stable outlook.

At the same time, the agency placed all Iceland Midco Ltd.’s ratings under review for downgrade, including its corporate family rating of Ba3, B1-PD probability of default rating and the Ba3 rating on Iceland Acquico Ltd.’s senior secured bank debt.

The review for downgrade was prompted by the announcement that the company plans to raise £955 million through the issuance of new senior secured notes at the level of Iceland VLNCo, the direct parent company of Iceland Midco.

Proceeds from the new senior secured notes, together with £77 million of existing cash balances, will be used to refinance the existing senior secured term loans and vendor loan note plus accrued and unpaid interest and to close out existing currency and interest rate swaps, as well as to pay fees and expenses.

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