Research Update: High Liner Foods Inc. Downgraded To 'B' From 'B+' On Weakened Financial Position

High Liner Foods Inc.'s year-to-date revenues and EBITDA, particularly in the third quarter, have been significantly weaker than expected due to both internal and external factors; as a result, we expect debt-to-EBITDA will be above 7x for the next 12-18 months. Therefore, we are lowering our issuer credit rating on High Liner to 'B' from 'B+' and revising our financial risk profile assessment on the company to highly leveraged from aggressive. We are also lowering our issue-level rating on High Liner's senior term loan to 'B' from 'B+'; the recovery ratings on the term loan is unchanged at '4'. The negative outlook reflects risks around High Liner's ability to execute its operational initiatives in the near term to increase both

...+ High Liner Foods Inc.'s year-to-date revenues and EBITDA, particularly in the third quarter, have been significantly weaker than expected due to both internal and external factors; as a result, we expect debt-to-EBITDA will be above 7x for the next 12-18 months. + Therefore, we are lowering our issuer credit rating on High Liner to 'B' from 'B+' and revising our financial risk profile assessment on the company to highly leveraged from aggressive. + We are also lowering our issue-level rating on High Liner's senior term loan to 'B' from 'B+'; the recovery ratings on the term loan is unchanged at '4'. + The negative outlook reflects risks around High Liner's ability to execute its operational initiatives in the near term to increase both its EBITDA and EBITDA margins to historical levels while addressing industry headwinds....

Research Update