Chobani Global Holdings LLC Outlook Revised To Negative From Stable; Rating Affirmed At 'B'

OVERVIEW We expect U.S.-based Chobani Global Holdings LLC to close on a leverage neutral refinancing to repay its high-coupon second-lien debt with incremental senior secured term debt and new senior unsecured notes. While this transaction reduces Chobani's overall borrowing costs, it removes non-cash payment-in-kind (PIK) interest, so we do not expect cash interest expense to materially decline. While the company's EBITDA growth was on track for 2016, we believe leverage in 2017 will be higher than originally anticipated due to a moderately lower adjusted EBITDA forecast combined with an expected working capital outflow and still-high capital expenditures that will limit free operating cash flow and debt repayment over the next year. We are revising our outlook on Chobani to negative

...OVERVIEW + We expect U.S.-based Chobani Global Holdings LLC to close on a leverage neutral refinancing to repay its high-coupon second-lien debt with incremental senior secured term debt and new senior unsecured notes. + While this transaction reduces Chobani's overall borrowing costs, it removes non-cash payment-in-kind (PIK) interest, so we do not expect cash interest expense to materially decline. + While the company's EBITDA growth was on track for 2016, we believe leverage in 2017 will be higher than originally anticipated due to a moderately lower adjusted EBITDA forecast combined with an expected working capital outflow and still-high capital expenditures that will limit free operating cash flow and debt repayment over the next year. + We are revising our outlook on Chobani to negative from stable and affirming our 'B' corporate credit rating on the company. + We are lowering the issue level rating on the company's senior secured facilities to 'B' from 'B+' and revising the recovery...

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