DBRS raises AGT to B, notes to BB

DBRS said it upgraded the issuer rating of AGT Food and Ingredients Inc. to B (high) and the senior secured high-yield notes to BB (low).

The trends have been changed to stable from positive.

DBRS said the upgrade of the notes reflects the upgrade of the issuer rating as well as a change in the recovery rating to RR3 from RR4. AGT’s new B (high) issuer rating is supported by the growth in its less-cyclical and higher-margin food ingredients and packaged foods segment, as well as its solid position in staple foods, diversification in terms of geography, suppliers and customers and favorable industry trends and demographics.

The rating also reflects the volatility of input costs and AGT’s sensitivity to weather, as well as the low-margin and capital-intensive nature of the legacy pulse processing business, competition with other commodity-type products and risks associated with the company’s growth.

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