Moody's rates Windsor loan B2

Moody's Investors Service said it assigned a B2 (LGD4, 61%) rating to a proposed $350 million seven-year senior secured term loan being offered by Windsor Quality Food Co. Ltd. as part of a refinancing transaction, upgraded the company's probability of default rating to B1-PD from B2-PD and affirmed its corporate family rating at B1. The outlook was revised to positive from stable.

Proceeds from the proposed covenant-light term loan will be used to repay all existing debt and for general purposes. As part of the refinancing, Windsor is also arranging a $100 million undrawn asset-based revolving loan facility that will not be rated by Moody's. The B1 (LGD3, 35%) rating assigned to its existing term loans and revolver will be withdrawn once the proposed refinancing is completed.

The positive outlook reflects the agency's belief that the proposed refinancing will strengthen Windsor's overall credit profile by providing financial flexibility needed to make important infrastructure investments that Moody's expects will lead to improved operating efficiency.

The agency said Windsor's B1 corporate family rating reflects the company's leading market position in the narrowly defined ethnic frozen foods category, modest financial leverage and solid liquidity profile.

In Moody's view, these positives are offset by the company's relatively small scale and product diversity compared to many of its peers and recent operational challenges in some of its plants that have caused earnings volatility.

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