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S&P cuts Tom's Foods senior debt
Standard & Poor's said it lowered its ratings on Tom's Foods Inc., including its corporate credit rating to CCC from B and senior secured debt to CCC- from B-, and removed them from CreditWatch, where they were placed Aug. 20. The outlook is negative.
The downgrade reflects S&P's concerns about Tom's Foods' ability to refinance, in a timely manner, its $17 million revolving credit facility due Oct. 22 and its $60 million 10½% senior secured notes due Nov. 1.
Tom's Foods continues to be highly leveraged and credit measures are weak. Lease-adjusted total debt to EBITDA was about 6.1x and lease-adjusted EBITDA coverage of interest expense was 1.6x for the 12 months ended Sept. 11.
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