Fitch assigns BB- to Dean Foods notes

Fitch Ratings said it assigned a BB- rating to Dean Foods Co.'s $700 million 6½% senior unsecured notes due 2023.

Dean plans to use the net proceeds to repay its $475.8 million 7% notes due in 2016 plus the estimated make-whole and interest for a total of $520.8 million. The proceeds will also go toward the repayment of its $70.3 million senior secured revolver balance and a portion of $235 million outstanding on its receivables-backed facility.

Fitch believes there will be a minor uptick in leverage of 0.1 times to 0.2 times due to associated fees and expenses related to this transaction. The indenture and covenants will be substantially similar to the existing 2016 notes.

The new notes will be guaranteed by Dean's material, wholly owned U.S. subsidiaries except receivables securitization subsidiaries.

The notes will have a change of control provision at 101 and will not have financial covenants.

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