Moody's changes AdvancePierre outlook to negative

Moody's Investors Service said it changed AdvancePierre Foods, Inc.'s outlook to negative from stable and affirmed its corporate family rating at B2, probability of default rating at B2-PD, $925 million first-lien term loan due 2017 at B1 (LGD3, 43%, revised from 44%) and $375 million second-lien term loan due 2017 at Caa1 (LGD5, 89%, revised from LGD6, 90%).

The agency said the change in the outlook reflects its view that leverage is very high for the rating category but is expected to materially improve during the next 12 months.

The B2 corporate family rating is reflective of the company's high leverage and aggressive financial policies, largely driven by its posture toward shareholder-friendly activities and the potential for large acquisitions, Moody's said.

The rating acknowledges that AdvancePierre benefits from increased size and scale, good diversity of product offerings and sales channels, modest customer diversification and its ability to pass through increased raw material costs, the agency said.

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