S&P downgrades Ocean Spray

Standard & Poor’s said it lowered the ratings on Ocean Spray Cranberries Inc., including its corporate credit rating to BBB from BBB+.

The agency also said it removed the ratings from CreditWatch with negative implications, where they were placed in March.

The outlook is negative.

The one-notch downgrade reflects an expectation that Ocean Spray will maintain debt leverage between 2x and 3x, inclusive of the cost of the cranberries-sold adjustment, the agency said.

S&P said it believes the company’s discretionary cash flow recently turned positive, but it may not be strong enough to improve cash flow ratios.

The agency also said it believes debt leverage may remain near 3x by fiscal year-end 2015, compared with the prior estimate of 2.6x.

The company expanded its product diversification to include additional snack offerings, S&P said, and it has diversified its supply base to secure additional crop acreage to meet growing demand.

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