Moody’s ups Deoleo, rates loans B2, Caa2

Moody’s Investors Service said it upgraded to B3 from Ca the corporate family rating and to B3-PD from Ca-PD the probability of default rating of Deoleo SA. The agency changed the outlook to stable from ratings under review.

Concurrently, Moody’s assigned a B2 rating to the €160 million senior secured term loan due 2025 and a Caa2 rating to the €82 million senior secured junior lien term loan due 2026, both borrowed by Deoleo’s indirect subsidiary Deoleo Financial Ltd. The outlook on Deoleo Financial is stable.

This rating action concludes the review for upgrade started on July 1, the agency said.

“The upgrade of Deoleo’s ratings reflects the improvement in the company’s capital structure following the recent restructuring of its debt, which entails significantly lower leverage, stronger liquidity and higher free cash flow generation capacity,” said Igor Kartavov, Moody’s lead analyst for Deoleo, in a press release.

“However, despite exceptionally strong financial performance demonstrated in the first half of 2020 and although we expect market conditions to remain benign in 2020-21, Deoleo remains exposed to the volatility in olive oil prices in the longer-term,” added Kartavov.

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