Conagra Brands Inc. Ratings Lowered To 'BBB-/A-3', Debt Ratings Lowered On Subsidiary Pinnacle's Weak Performance

U.S.-based Conagra Brands Inc. disclosed weak performance at its recently acquired Pinnacle Foods subsidiary, primarily due to unsustainable promotions and weak innovation under the prior Pinnacle Foods management team. We have updated our forecast and expect credit ratio improvement will be slower than previously anticipated due to an approximately 7% pro forma fiscal 2019 consolidated EBITDA shortfall and a reduction in pro forma discretionary cash flow (DCF) to about $550 million from $675 million previously. We now anticipate that adjusted leverage will remain above 4x for more than two years after the October 2018 Pinnacle Foods acquisition date, possibly up to three years. We are lowering all of our ratings on Conagra, including the issuer credit rating to 'BBB-/A-3' from

...+ U.S.-based Conagra Brands Inc. disclosed weak performance at its recently acquired Pinnacle Foods subsidiary, primarily due to unsustainable promotions and weak innovation under the prior Pinnacle Foods management team. + We have updated our forecast and expect credit ratio improvement will be slower than previously anticipated due to an approximately 7% pro forma fiscal 2019 consolidated EBITDA shortfall and a reduction in pro forma discretionary cash flow (DCF) to about $550 million from $675 million previously. We now anticipate that adjusted leverage will remain above 4x for more than two years after the October 2018 Pinnacle Foods acquisition date, possibly up to three years. + We are lowering all of our ratings on Conagra, including the issuer credit rating to '###-/A-3' from '###/A-2', the senior unsecured debt rating to '###-' from '###', the subordinated debt rating to '##+' from '###-', and the short term rating on the commercial paper to 'A-3' from 'A-2'. + The stable outlook...

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