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S&P rates Diamond Foods loan B-, notes CCC+
Standard & Poor's said it assigned a B- corporate credit rating to Diamond Foods Inc.
The agency also said it assigned a B- rating to the company's proposed $415 million first-lien term loan due 2019. The recovery rating is 3, indicating 50% to 70% expected default recovery.
S&P also said it assigned a CCC+ rating to the company's proposed $230 million senior unsecured notes due 2019. The recovery rating is 5, indicating 10% to 30% expected default recovery.
The outlook is stable.
The ratings reflect the company's vulnerable business risk profile and highly leveraged financial risk profile, said Bea Chiem, an S&P analyst.
The proceeds from the new $415 million first-lien term loan and $230 million senior unsecured notes, along with $29 million of proceeds from the existing Oaktree warrants being exercised, are expected to refinance about $617 million of Diamond's existing debt and to cover a roughly $33 million call premium related to the repayment of the Oaktree notes, Chiem said in a press release.
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