Moody's: Bright Food notes Baa3

Moody's Investors Service said it assigned a Baa3 rating to the dollar-denominated notes to be issued by Bright Food Hong Kong Ltd. and guaranteed by Bright Food (Group) Co., Ltd. The latter's Baa3 issuer rating was affirmed, and the outlook is stable.

The note proceeds will be used to refinance the short-term bridging loan financing the company's acquisition of Weetabix.

The agency said Bright Food's 2012 financial results and financial plan continue to support its Baa3 ratings. Its consolidated revenue and EBIT of RMB 90.7 billion and RMB 3.9 billion in 2012, respectively, were largely in line with Moody's expectations.

Bright Food's ratings reflect the low demand risk and stable profit margins of its food and agriculture business; its strong growth, as underpinned by a favorable industry outlook and its successful expansion strategy; and its diversified and ample funding channels, Moody's said.

These strengths are counterbalanced by the group's integration risk because of recent acquisitions and previous business restructuring, near-term earnings pressure as a result of volatility in sugar prices and weak operating cash flow and high leverage, Moody's said.

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