Moody's affirms Dole notes at B2

Moody's Investors Service said it affirmed the B2 (LGD3, 37%) rating assigned to Dole Food Co., Inc.'s proposed third-lien notes due 2016, the size of which is now $315 million instead of $325 million.

The agency also affirmed Dole's corporate family rating at B2, probability-of-default rating at B3, senior secured term loan B and senior secured prefunded letter-of-credit facility at Ba2 (LGD1, 9%), $349.9 million senior secured third-lien notes due 2014 at B2 (LGD3, 37%) and senior unsecured notes at Caa1 (LGD5,76%).

The outlook is stable.

The proceeds of the new notes will be used refinance a material portion of the $363 million of bonds due June 2010.

The agency said the affirmations are based on Dole's continued solid operating performance, this proposed action to refinance a material portion of the June 2010 bonds and the planned elimination of $115 million of debt at an affiliate guarantor. This debt is non-recourse to Dole, but a default would trigger a cross-default to Dole's senior secured bank facilities.

Moody's added that improved operating margins and debt reductions from asset sales have reduced the debt-to-EBITDA ratio to 5.7 times for the 12 months ended June 20 from 9.4 times at the end of fiscal 2006.

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