Moody’s assigns TreeHouse facilities Ba2

Moody’s Investors Service said it assigned Ba2 ratings to amended and extended bank credit facilities being arranged by TreeHouse Foods, Inc.

The planned $2.18 billion senior secured credit facilities are comprised of an undrawn $750 million five-year revolving facility, a $930 million five-year term loan A-1 and a $500 million seven-year secured term loan A. TreeHouse’s ratings, including its Ba3 corporate family rating, Ba3-PD probability of default rating, B2 senior unsecured debt and SGL-2 speculative grade liquidity, are unaffected.

The planned facilities replace $1.88 billion of secured bank facilities comprised of an undrawn $750 million revolving facility due February 2023, a $673 million term loan A-1 due February 2023 and a $453 million term loan A due January 2025.

Proceeds, along with cash on hand, will be used to repay about $403 million of 6% unsecured notes due February 2024. TreeHouse previously purchased $200 million of these notes earlier this year. The notes are redeemable at any time on or after Feb. 15, 2019 at step-down prices currently set at 101.5%.

“The transaction is credit positive because it will extend TreeHouse’s debt maturities, lower cash interest costs and reduce financial leverage,” Moody’s said in a press release.

The outlook is stable.

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