Bangkok--8 Nov--Standard & Poor's
SAN FRANCISCO (Standard & Poor's) Nov. 7, 2013-- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to San Francisco-based Del Monte Foods Consumer Products Inc. (DMCP) The outlook is stable.
At the same time, we assigned a 'B+' issue-level rating to the company's proposed $650 million first lien term loan due 2020. The recovery rating is '2', indicating that lenders could expect substantial (70% to 90%) recovery in the event of a payment default. We assigned a 'CCC+' issue-level rating to the company's proposed $280 million second lien term loan due 2021. The recovery rating is '6', indicating that lenders could expect negligible (0% to 10%) recovery in the event of a payment default. All ratings are subject to review upon receipt and review of final documentation.
"The ratings reflect our assessment of DMCP's leading share positions, strong brand recognition, participation in slower growth categories with a greater degree of private-label penetration, exposure to volatile input costs, and limited brand and geographic diversification," said Standard & Poor's credit analyst Bea Chiem.
Proceeds from the new $930 million in first- and second-lien term loans along with $76 million expected to be drawn on the company's proposed $350 million asset-based lending facility (unrated), and $747 million of equity contributed by Del Monte Pacific Limited, are expected to fund the purchase of DMCP and to cover transaction fees.