Research Update: Del Monte Foods Inc. Rating Placed On Watch Positive Amid Proposed Refinancing; New Debt Assigned Preliminary Rating

U.S.–based Del Monte Foods Inc.'s (DMFI) is launching a $500 million senior secured bond offering and is seeking a new $450 million ABL facility (unrated) to refinance its existing capital structure that are current obligations. We are assigning a preliminary 'CCC+' issue-level and '3' recovery rating to the proposed senior secured notes. The complete refinancing also includes the $260 million second-lien term loan, previously repurchased through parent DMPL to be taken out at the group level with equity sale proceeds from a subsidiary of the group Del Monte Philippines Inc. In addition, DMPL, will use $150 million newly committed three-year bridge loans to fund new common shares at DMFI. Lastly, subject to the restricted payments basket on the proposed agreements,

...- U.S.¡based Del Monte Foods Inc.'s (DMFI) is launching a $500 million senior secured bond offering and is seeking a new $450 million ABL facility (unrated) to refinance its existing capital structure that are current obligations. - We are assigning a preliminary '###+' issue-level and '3' recovery rating to the proposed senior secured notes. - The complete refinancing also includes the $260 million second-lien term loan, previously repurchased through parent DMPL to be taken out at the group level with equity sale proceeds from a subsidiary of the group Del Monte Philippines Inc. In addition, DMPL, will use $150 million newly committed three-year bridge loans to fund new common shares at DMFI. Lastly, subject to the restricted payments basket on the proposed agreements, DMFI could pay interest to DMPL on its dated account payables. - Additionally, DMPL and some of its subsidiaries have $187 million of debt maturing in August through October 2020 that are expected to be refinanced by May...

Research Update