Research Update: Del Monte Foods Inc. Issuer Credit Rating Raised To 'CCC' On Debt Restructuring; Outlook Negative; New Debt Rated

U.S.-based Del Monte Foods Inc. completed a debt restructuring on Aug. 14, 2024, that includes a new super-priority first-lien credit agreement and new asset-backed lending (ABL) agreement. Borrowers of the company's original $725 million ($712 million outstanding at time of transaction) term loan B due 2029 under Del Monte Foods Inc. (DMFI) had until Aug. 12 to participate in the first-out new money transaction. The borrower under the new facility is Del Monte Foods Corp. II Inc. (DMFC II), a new indirect wholly owned subsidiary of the group. DMFI remains the borrower of the existing term loan. As a result of the transaction, we raised our issuer credit rating on DMFI to 'CCC' from 'SD'(selective default), because we can envision

...- U.S.-based Del Monte Foods Inc. completed a debt restructuring on Aug. 14, 2024, that includes a new super-priority first-lien credit agreement and new asset-backed lending (ABL) agreement. Borrowers of the company's original $725 million ($712 million outstanding at time of transaction) term loan B due 2029 under Del Monte Foods Inc. (DMFI) had until Aug. 12 to participate in the first-out new money transaction. The borrower under the new facility is Del Monte Foods Corp. II Inc. (DMFC II), a new indirect wholly owned subsidiary of the group. DMFI remains the borrower of the existing term loan. - As a result of the transaction, we raised our issuer credit rating on DMFI to '###' from '##'(selective default), because we can envision a default scenario within the next year. DMFI's capital structure remains unsustainable, and liquidity remains constrained. - We assigned issue-level and recovery ratings to the following new debt tranches under the super-facility issued by DMFC II: - --$236.4...

Research Update