Moody's affirms Bumble Bee, Clover Leaf

Moody's Investors Service said it affirmed Bumble Bee Foods LLC's and Clover Leaf Seafoods LP's Ba3 corporate family rating and senior secured credit facilities and SGL-2 speculative grade liquidity. The outlook is stable.

The affirmation follows a change in the financial covenants in the senior secured credit facilities which, in Moody's view, modestly increase the risk of the structure but to a degree insufficient to warrant a change in the companies' ratings or outlook.

Changes in financial covenants include the elimination of an initial 3x debt to EBITDA test governing the ability of the operating companies to upstream dividends to their parent company - Connors Brothers Income Fund - as well as the ability of Connors to make distributions on its equity units in amounts that exceed its internally generated cash after Dec. 31, 2006 as long as debt to EBITDA declines below 2.5x. Additionally, an enterprise debt to EBITDA maintenance financial covenant was tightened to 3.25x from 3.5x.

Moody's view is that the proposed covenant changes modestly weaken the structure for two reasons: the company's most restrictive covenant will now accommodate higher leverage and the company will, under certain circumstances, be allowed to pay out more cash flow as distributions than it internally generates.

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