Moody's rates US Foods notes Caa1

Moody's Investors Service said it gave a Caa1 rating to US Foods, Inc.'s proposed unsecured notes due 2029. Concurrently, Moody's upgraded the speculative-grade liquidity rating to SGL-1 from SGL-2. The company's other ratings are unchanged, including the B2 corporate family rating, the B3 senior secured bank facility and notes ratings and Caa1 senior unsecured notes rating. The outlook remains stable.

The proposed $600 million of senior unsecured notes due 2029 will be used to refinance the $600 million of 5 7/8% senior unsecured notes due 2024 and pay for transaction fees and expenses.

“Moody's views the refinancing as a modest credit positive because it extends the company's debt maturity profile and slightly reduces interest expense,” the agency said in a press release.

The upgrade to SGL-1 reflects US Foods' improved liquidity supported by the repayment of borrowings on the company's $1.99 billion asset-based revolver and $1 billion balance sheet cash, Moody’s said.

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