Moody's upgrades Aspire Bakeries

Moody's Investors Service said it upgraded Aspire Bakeries Holdings, LLC’s ratings, including the company's corporate family rating to B2 from B3, probability of default rating to B2-PD from B3-PD, the company's senior secured first-lien revolving credit facility and senior secured first-lien term loan to B1 from B2 and senior secured second-lien term loan to Caa1 from Caa2.

“The rating upgrades reflect Aspire's deleveraging progress over the last year as debt/EBITDA (on a Moody's adjusted basis) has declined to 4.3x for the fiscal year ended July 29, 2023, from 6.6x as of July 30, 2022. Absent acquisitions or distributions, Moody's expects debt/EBITDA to decline to below 4x over the next 12 months. Deleveraging is being driven by earnings growth as Aspire's revenue increased 10% and EBITDA (on a Moody's adjusted basis) increased 40% in fiscal 2023. Earnings growth reflects the impact of pricing actions catching up to costs as inflation has moderated, along with many one-time carve-outs and pandemic-related costs rolling off,” the agency said in a press release.

Moody’s said it expects Aspire’s revenue to grow at a low to mid-single-digit rate in fiscal 2024, and EBITDA to grow more than 20%.

The outlook is stable.

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