Moody’s ups Darling loans, debt, rates notes Ba3

Moody's Investors Service said it affirmed the corporate family rating of Darling Ingredients Inc. and changed the outlook to negative from stable.

The agency also changed several other of Darling's ratings in connection with the issuance of new debt which changes the overall secured/unsecured mix within the company's capital structure.

As such, Moody's upgraded Darling's senior secured bank credit facilities to Ba1 from Ba2 and senior unsecured debt to Ba3 from B1.

The agency also assigned a Ba3 rating to Darling Global Finance BV's (a wholly owned, indirect subsidiary of Darling) proposed €515 million senior unsecured notes.

Darling's speculative grade rating was lowered to SGL-2 from SGL-1.

"The negative outlook reflects the material volatility and weakness in Darling's operating performance, its moderately high financial leverage, and the possibility of a ratings downgrade if earnings do not improve," Moody’s vice president and senior analyst Dominick D'Ascoli said in a news release.

Darling's earnings and cash flow have exhibited a greater degree of volatility than the agency previously expected. A significant contributor to recent volatility and weaker performance has been a material decline in corn and fat prices. EBITDA is well below prior expectations and debt to EBITDA has increased to 4.6 times for the 12 months ended April 4, 2015, Moody’s said.

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