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Moody’s assigns Hormel notes A1
Moody’s Investors Service said it assigned an A1 rating to $1 billion of 10-year senior unsecured notes being sold by Hormel Foods Corp.
Proceeds will be used for general corporate purposes, which Moody’s said it anticipates will include acquisitions.
“Our view is partly based on Hormel’s limited need for additional liquidity. Hormel currently has over $600 million of cash on its balance sheet as of April 26, 2020 and typically generates over $450 million of free cash flow annually. Its next significant debt maturity is in April 2021 when its $250 million 4.125% unsecured notes mature. Pro forma the proposed issuance, debt/EBITDA will remain low at less than 1.5x. Net debt will be negative $350 million,” Moody’s said in a press release.
The outlook is stable.
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