Moody’s drops Milk Specialties, loans

Moody's Investors Service said it downgraded Milk Specialties Co.’s corporate family rating to Caa1 from B3 and probability of default rating to Caa2-PD from Caa1-PD.

At the same time, the agency downgraded the company's senior secured credit facilities, which include a $250 million principle senior secured term loan and a $35 million revolving credit facility, to Caa1 from B3.

The outlook was changed to negative from stable.

Moody’s said the downgrade was primarily driven by the company's weak liquidity profile, which has recently been impacted by a breach in covenants due to the inability to file financial statement by deadlines prescribed under terms of its credit facilities, a substantial decline in operating profits, as well as Moody's belief that leverage will remain high for the foreseeable future.

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