S&P rates B&G Foods notes B+

S&P said it assigned its B+ issue-level rating to B&G Foods Inc.'s planned $500 million of senior secured notes due 2028 and affirmed its B+ issue-level rating on B&G Foods' senior secured term loan B and revolving credit facilities.

The 1 recovery rating remains unchanged, indicating very high recovery (90%-100%; rounded estimate: 90%) in default. Concurrent with the transaction, the company is amending its senior secured facilities' credit agreement to add a new basket to include incremental first-lien pari passu capacity. As a result, the notes will rank equally with the company's first-lien term loan.

The company plans to use the proceeds to redeem $555 million of its $900 million, with $855 million outstanding, of senior unsecured notes due April 2025.

At the same time, S&P lowered the issue-level rating on the company's unsecured notes to CCC from CCC+ and revised the recovery rating to 6 from 5. The 6 recovery rating indicates negligible recovery (0%-10%; rounded estimate: 0%).

“The lower recovery rating on these notes reflects the increase in priority debt in B&G's capital structure, which reduces the net value available to the unsecured creditors and weakens their recovery prospects. The remaining senior unsecured debt includes $300 million 5¼% senior unsecured notes due 2025 and $550 million 5¼% notes due 2027.

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