Research Update: Moran Foods LLC Upgraded To 'CCC+' From 'SD' Following Distressed Debt Exchange; Outlook Negative

Missouri-based wholesale distributor Moran Foods LLC (doing business as Save-A-Lot) refinanced its capital structure in October 2023, a transaction we viewed as a distressed exchange tantamount to default. Following completion of the exchange, we raised our issuer credit rating on the company to 'CCC+' from 'SD' (selective default). At the same time, we assigned our 'CCC-' issue-level rating to its first-lien, first-out payment-in-kind (PIK) and first-lien, second-out PIK term loans. We also raised our rating on Moran Foods' first-lien, first-out and first-lien, second-out term loans due in 2026 to 'CCC-' from 'D', and on its second-lien term loans due in 2024 and 2026 to 'CCC-' from 'D'. The negative outlook reflects the risk that we will lower our rating if

...- Missouri-based wholesale distributor Moran Foods LLC (doing business as Save-A-Lot) refinanced its capital structure in October 2023, a transaction we viewed as a distressed exchange tantamount to default. - Following completion of the exchange, we raised our issuer credit rating on the company to '###+' from '##' (selective default). - At the same time, we assigned our '###-' issue-level rating to its first-lien, first-out payment-in-kind (PIK) and first-lien, second-out PIK term loans. We also raised our rating on Moran Foods' first-lien, first-out and first-lien, second-out term loans due in 2026 to '###-' from 'D', and on its second-lien term loans due in 2024 and 2026 to '###-' from 'D'. - The negative outlook reflects the risk that we will lower our rating if we view a specific default scenario, such as a selective default, as increasingly likely in the next 12 months....

Research Update