Research Update: Upfield (Sigma HoldCo B.V.) Upgraded To 'B' On Improved Deleveraging Prospects; Outlook Stable

Global plant-based food producer Upfield demonstrated stronger-than-expected operational resilience in 2022, despite the difficult market conditions. It continued to reduce its leverage toward 9.1x while generating free operating cash flow (FOCF) of €215 million. As profitability gradually improves over the next 12 months, we expect S&P Global Ratings-adjusted leverage to drop below 7x, with FOCF of €200 million-€300 million, allowing the company to address its remaining term loan maturities in 2025. Therefore, we raised to 'B' from 'B-' our long-term issuer credit rating on Upfield's parent, Sigma HoldCo B.V., and our issue ratings on the revolving credit facility (RCF) and term loan B. We also raised our issue rating on the subordinated unsecured notes to 'CCC+' from 'CCC'. We revised

...- Global plant-based food producer Upfield demonstrated stronger-than-expected operational resilience in 2022, despite the difficult market conditions. It continued to reduce its leverage toward 9.1x while generating free operating cash flow (FOCF) of 215 million. - As profitability gradually improves over the next 12 months, we expect S&P Global Ratings-adjusted leverage to drop below 7x, with FOCF of 200 million-300 million, allowing the company to address its remaining term loan maturities in 2025. - Therefore, we raised to 'B' from 'B-' our long-term issuer credit rating on Upfield's parent, Sigma HoldCo B.V., and our issue ratings on the revolving credit facility (RCF) and term loan B. We also raised our issue rating on the subordinated unsecured notes to '###+' from '###'. - We revised up to '3' from '4' our recovery rating on the RCF and term loan B, based on improved recovery prospects after the company repaid its 250 million term loan earlier this year. - The stable outlook indicates...

Research Update