Moody's confirms U.S. Foods

Moody's Investors Service said it confirmed the ratings of U.S. Foods, Inc., concluding the review for upgrade that begin in December, and assigned an SGL-2 speculative grade liquidity rating to the company. The company has a B3 corporate family rating and a B3-PD probability of default rating, and its senior secured credit facility and senior bonds are rated B2 (LGD3) and Caa2 (LGD5), respectively.

"Today's confirmation results from Sysco's termination of the agreement whereby it would have acquired U.S. Foods," Moody's vice president Charlie O'Shea said in an agency news release. "As a by-product of the termination process, U.S. Foods' parent (USF Holding Corp.) will receive a $300 million break-up fee, and U.S. Foods will pay Performance Food Group a $12.5 million break-up fee. Depending on disposition, the net proceeds could aid liquidity.

"Now that it will continue as an independent company, U.S. Foods' challenges remain, including improving its quantitative credit profile, specifically reducing its debt/EBITDA of 7.6 times and increasing its EBITA/interest of 1.4 times, both of which are at the March 2015 LTM."

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.