Moody's rates WEI Sales Ba3

Moody's Investors Service said it assigned a corporate family rating of Ba3 to WEI Sales LLC, along with a probability of default rating of Ba3-PD and negative outlook.

Moody's also is correcting the issuer rating for the term loan B on WEI Sales Inc. to B1.

The final loss given default rating (LGD) assessment is being changed to LGD 5 from LGD 4, the agency said.

The ratings on Wells Enterprises Inc. also were withdrawn.

Wells Enterprises acquired FieldBrook Foods Co. for an undisclosed amount.

Moody's said it expects that Wells will finance the acquisition primarily with debt.

The negative outlook reflects higher expected leverage that will exceed 3x following the FieldBrook transaction, the agency said.

Moody's believes there is execution risk related to the company's ability to meaningfully reduce debt and lower leverage lower than 3x over the next 12- to 18-months because projected free cash flow and EBITDA growth are modest.

The agency also said it believes earnings growth may be constrained by increasing costs in milk and freight that may not be quickly absorbed by its customers.

Nevertheless, Moody's said it expects the acquisition of FieldBrook will provide operational benefits and diversify its revenue mix.

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