Moody's ups Del Monte outlook to positive

Moody's Investors Service said it changed the outlook of Del Monte Corp. to positive from stable based on the continued ability of the company to grow its well-established food brands and to maintain profit margins.

Del Monte's financial policy of debt reduction has also contributed to improved credit metrics, the agency said.

Consequently lower levels of senior secured debt resulted in an upgrade of those instruments in accordance with Moody's loss given default methodology, the agency said.

Moody's added that it affirmed the company's other long-term ratings, including its Ba3 corporate family and probability of default ratings.

Del Monte's speculative-grade liquidity rating was lowered to SGL-3 from SGL-2, the agency said.

According to the agency, the change in outlook to positive incorporates Moody's expectation that internal cash flow generation will remain robust as the company's significant market positions, marketing investment and new product introductions will allow it to pass along price increases to offset any future cost pressures.

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