Research Update: Del Monte Foods Inc. Downgraded To 'SD', Second-Lien Rating Lowered To 'D' On Debt Buyback At Less Than Par

U.S.–based Del Monte Foods Inc.'s (Del Monte's) parent, Del Monte Pacific Ltd. (DMPL), has repurchased about $129 million of its $260 million second-lien term loan due August 2021 at a 30% discount to par. We are lowering our corporate credit rating on Del Monte to 'SD' (selective default) from 'CCC-'. Additionally, we are lowering our issue-level rating on the second-lien term loan to 'D' from 'C'. The '6' recovery rating remains unchanged. We are affirming our 'CCC-' issue-level rating on the company's first lien term loan, and the recovery rating remains '3'. We will likely raise the corporate credit rating to the 'CCC' category following our review of the new capital structure because we still expect leverage to be near

...+ U.S.¡based Del Monte Foods Inc.'s (Del Monte's) parent, Del Monte Pacific Ltd. (DMPL), has repurchased about $129 million of its $260 million second-lien term loan due August 2021 at a 30% discount to par. + We are lowering our corporate credit rating on Del Monte to '##' (selective default) from '###-'. Additionally, we are lowering our issue-level rating on the second-lien term loan to 'D' from 'C'. The '6' recovery rating remains unchanged. We are affirming our '###-' issue-level rating on the company's first lien term loan, and the recovery rating remains '3'. + We will likely raise the corporate credit rating to the '###' category following our review of the new capital structure because we still expect leverage to be near 10x. In our review, we will evaluate the company's liquidity, cash flows, and ability to deleverage under new management's strategic initiatives....

Research Update