Moody’s lowers High Ridge to B3

Moody's Investors Service said it downgraded High Ridge Brands Co.’s corporate family rating to B3 from B2 and probability of default rating to B3-PD from B2-PD.

The agency also affirmed the Caa1 rating on the company's senior unsecured notes.

The outlook is negative.

Moody’s said the downgrade reflects meaningful revenue and earnings pressure including the loss of distribution for some key products at Wal-Mart.

“In addition, there have been widespread changes to the company's management team and Moody's recognizes the high level of execution risk regarding the ability of the new team to grow revenues and stabilize operating performance,” the agency said in a news release.

“Thus, Moody's believes that significant reductions in leverage will not be forthcoming.

“With weaker EBITDA, Moody's expects adjusted debt to EBITDA to remain above 8.0x for the next 12 months. Leverage will continue to improve over time, but at a much slower pace than originally expected.”

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