Fitch rates Dairy Farmers preferreds BBB-

Fitch Ratings said it assigned a BBB- rating to Dairy Farmers of America Inc.’s $150 million 7.125% perpetual preferred stock.

The new securities rank junior to senior debt and capital securities, Fitch said.

The preferred stock will not be redeemable prior to Dec. 1, 2026, the agency said.

Fitch said it grants 50% equity credit to the cooperative's preferred stock after considering the junior ranking, perpetuity, the option to defer dividends and cumulative coupon deferral.

The company’s member milk payments are subordinate to all operating costs, including debt service and preferred dividends, the agency added.

The proceeds will be used for general corporate and business purposes, Fitch said.

The outlook is stable.

Dairy Farmers also has a long-term issuer default rating of BBB+, short-term issuer default rating of F2, commercial-paper rating of F2, senior unsecured notes rating of BBB+, senior unsecured credit facility rating of BBB+ and perpetual preferred stock rating of BBB-.

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