Fitch assigns Nomad Foods BB, notes, loan BB+

Fitch Ratings said it assigned Nomad Foods Ltd. a first-time long-term issuer default rating of BB with a stable outlook.

Fitch also assigned a BB+ senior secured rating to the notes and loans issued by Nomad Foods BondCo plc, Nomad Foods US LLC, Nomad Foods Lux Sarl and Nomad Foods Europe Midco Ltd., 100%-owned subsidiaries of Nomad Foods.

“The IDR of Nomad Foods reflects its position as the largest western European frozen food producer and its moderate financial risk profile, which is balanced by weaker diversification than investment-grade peers'. The rating is supported by superior free cash flow (FCF) generation, although we believe that cash is likely to be used primarily to fund its bolt-on M&A strategy rather than repay debt,” Fitch said in a press release.

The outlook reflects the company's resilience to disruptions from the pandemic given limited underlying exposure to the foodservice channel and counter-cyclical nature of the company's products, Fitch said.

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