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Moody’s changes Dole outlook to stable
Moody's Investors Service said it changed the outlooks for Dole plc, Finantic Ltd. and Total Produce USA Holdings Inc. to stable from negative.
The agency also affirmed Dole's Ba3 corporate family rating, Ba3-PD probability of default rating and Ba3 rating on the company's $600 million senior secured first-lien revolving credit facility. Additionally, Moody's affirmed the Ba3 ratings on Finantic's $300 million senior secured first-lien term loan A and Total Produce USA Holdings Inc.'s $540 million senior secured first-lien term loan B. Finally, it upgraded Dole's speculative grade liquidity rating to SGL-2 from SGL-3.
“The outlook revision to stable from negative reflects Dole's improved credit metrics over the past year and Moody's expectations that the company will continue to focus on reducing balance sheet leverage. In 2022, Dole faced a number of headwinds including cost inflation, weather-related issues that impacted its sourcing, a salad recall, and operating challenges in it fresh vegetables division that caused its debt to EBITDA to rise slightly above 4x.
“However, recently these headwinds have subsided, resulting in improved credit metrics for the company. Dole utilized its good free cash flow and asset proceeds to repay debt. In addition, Dole announced in January 2023 an agreement to sell its fresh vegetables division to Fresh Express Inc. for $293 million in cash, with proceeds earmarked for debt reduction. Following the sale of its Fresh Vegetables division, Dole will have lower leverage and strong free cash flow,” Moody’s said in a press release.
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