Moody's lowers Bumble Bee notes

Moody's Investors Service said it downgraded the corporate family rating of Bumble Bee Holdings, Inc. to B3 from B2, as well as its probability of default rating to B3-PD from B2-PD and its $565 million 9% senior secured notes due 2017 to B3 from B2.

The outlook was changed to stable from negative.

Moody's also downgraded parent company Bumble Bee Holdco SCA's $150 million senior unsecured HoldCo PIK toggle notes due 2018 to Caa2 from Caa1.

Moody's said the downgrade reflects its view that leverage has increased to levels that are more appropriate for the B3 rating category, largely driven by EBITDA weakness spurred by relatively high fish costs and the inability to fully pass on those costs to consumers through higher pricing.

While the agency said it believes management has done an effective job managing the company's margins in a difficult operating environment, shelf-stable seafood industry fundamentals no longer support the degree of deleveraging anticipated at the time of the company's 2011 dividend recapitalization.

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