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Del Monte Downgraded

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On March 23, 2018, S&P Global Ratings lowered its corporate credit rating on Del Monte Foods, Inc. to CCC- from CCC+, its $710 million first-lien term loan due 2021 to CCC- from CCC+ and its $260 million second-lien term loan due 2021 to C from CCC-. According to S&P Global, the downgrade reflects S&P’s expectation for leverage to remain elevated above 10x over the next 12-18 months. S&P believes the Company’s capital structure is unsustainable and will remain that way absent a significantly favorable change. S&P further states, in addition, the Company has not yet extended the maturity of its asset-backed lending (ABL) facility that is set to mature in February 2019, but has started negotiations. S&P believes refinancing risk exists as lenders may be unwilling to extend the facility given the elevated leverage levels and underperformance to the budget that existing ABL lenders signed up for on the original transaction. Read more on distressed companies.

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