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Moody's assigns Dole plc Ba3
Moody's Investors Service said it assigned first-time ratings for Dole plc, including a Ba3 corporate family rating, a Ba3-PD probability of default rating, and a Ba3 rating on a $600 million senior secured first-lien revolving credit facility.
Also, Moody's assigned Dole an SGL-2 speculative-grade liquidity rating and Ba3 ratings for Finantic Ltd.'s $300 million senior secured first-lien term loan A and Total Produce USA Holdings Inc.'s $540 million senior secured first-lien term loan B. The outlook is stable.
The proceeds will be used to refinance debt at Total Produce and Dole Food Co., Inc.
“The first-time ratings are assigned in conjunction with the pending merger of Total Produce and Dole Food and will replace the stand-alone ratings on Dole Food that are currently on review for upgrade. Moody's expects to withdraw Dole Food's ratings including the B2 CFR once the merger and refinancing are completed. The transaction is being supported by a $500 million - $700 million equity offering that will be used to help limit the amount of debt on the consolidated company to a lower level than currently exists at the two stand-alone companies,” the agency said in a press release.
“Dole plc's Ba3 CFR reflects the company's significant scale with $9.7 billion in LTM pro-forma revenues as of Dec., 31, 2020, broad geographic presence, and its leading market share in fruit and vegetables. The rating is constrained by the company's low EBITDA margin and free cash flow as well as its elevated Moody's adjusted-debt-to-EBITDA leverage (pro-forma for the merger, an estimated $600 million equity offering, and the proposed refinancing) of 4.2x as of Dec. 31, 2020,” Moody’s explained.
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