Moody's ups B&G's senior unsecured notes to B2

Moody's Investors Service said it upgraded B&G Foods, Inc.'s $240 million 8% senior unsecured notes to B2 (LGD4, 51%) from B3, concluding the review for upgrade that began on May 15. Moody's also affirmed B&G's B2 corporate family and probability-of-default ratings and Ba2 (LGD2, 11% from 16%) $25 million senior secured revolving credit agreement due 2011 and $130 million senior secured term loan C due 2013, and its Caa1 (LGD5, 88% from 89%) $166 million 12% senior subordinated notes due 2016.

The outlook is stable.

In May, the company issued class A shares for $13 per share and used some of the $193.2 million in proceeds to repay its term loan C, reducing the amount of debt that ranks ahead of B&G's senior unsecured notes, Moody's said.

The company's corporate family rating reflects its relatively stable cash flow, good product diversification and double-digit EBITA margins, the agency said.

The rating also reflects the company's high leverage, the maturity of many of its brands and a growth strategy that has relied on leveraged acquisitions, Moody's said.

The stable rating outlook is based on Moody's expectation that Cream of Wheat's sales will stabilize and that its margin will be preserved over the intermediate term, according to the agency.

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