S&P downgrades Ferrara Candy, loans

S&P said it lowered its corporate credit rating on Ferrara Candy Co. to B- from B.

The outlook is stable.

At the same time, the agency downgraded the issue-level rating on the company's $535 million first-lien term loan maturing in 2023 to B- from B with a 3 recovery rating, indicating an expectation for meaningful recovery (50%-70%, rounded estimate: 55%) in the event of a payment default.

In addition, S&P lowered its issue-level rating on the company's $140 million second-lien term loan maturing in 2023 to CCC from CCC+, with a 6 recovery rating, indicating an expectation for negligible recovery (0%-10%, rounded estimate: 0%) in the event of payment default.

The agency estimates that for the fiscal year-end 2016 the company had about $815 million of total debt outstanding.

"The downgrade reflects the operational missteps in pricing and distribution within the private-label and nonorganic brands, and challenges in the scale-up of the branded organics platform that strained capacity to fulfill customer orders," S&P credit analyst Stephanie Harter said in a news release.

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