Moody's upgrades Bright Food

Moody's Investors Service said it upgraded the issuer rating on Bright Food (Group) Co., Ltd. to Baa2 from Baa3.

The agency also upgraded the senior unsecured rating on the euro-denominated notes issued by Bright Food Singapore Holdings Pte. Ltd. to Baa2 from Baa3.

The outlook is stable.

The upgrades reflect the company's improved business profile and track record of de-leveraging since 2016, which also supports an expectation that the company will maintain these improvements over the next two years, Moody's explained.

Bright Food's level of business risk has declined with its greater level of business diversification and successful integration of its overseas businesses, the agency said.

The company's adjusted debt-to-EBITDA ratio dropped to 5.5x at the end of 2017 from about 8.3x at the end of 2015, Moody's noted.

But the agency said it expects this metric will have risen to about 6.3x at the year-end 2018 as its subsidiary, Bright Real Estate Group Co. Ltd., replenished its land bank.

But, Moody's also said it expects its real estate subsidiary to balance its land purchases with the proceeds from property sales.

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