S&P trims TreeHouse Foods

S&P said it trimmed TreeHouse Foods Inc.’s issuer rating to B from B+, the company's senior secured credit facilities to BB- from BB and the unsecured notes to CCC+ from B+. The secured credit facilities 1 recovery rating is unchanged, and the unsecured recovery rating is 6, indicating expectations of negligible (0%-10%; rounded percentage: 0%) recovery in default.

“The downgrade of the company reflects the deterioration in credit metrics resulting from continued high cost inflation and a slow demand recovery. For the 12-months-ended Sept. 30, 2021, we estimate adjusted leverage (pro forma for the Riviana acquisition) increased to about 6.2x, up from 6x for the 12-months-ended in June. The higher leverage primarily reflects margin deterioration resulting from continued high inflation in packaging, freight, labor, and other input costs that are outpacing the company's ability to increase prices,” S&P said in a press release.

The agency also noted TreeHouse is conducting a strategic review.

The outlook is developing.

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