Moody's slashes Naked Juice

Moody's Investors Service said it downgraded Naked Juice LLC's corporate family rating to B3 from B1, probability of default rating to B3-PD from B1-PD, senior secured first-lien term loan, senior secured first-lien delayed-draw term loan and senior secured revolving credit facility ratings to B2 from Ba3, and senior secured second-lien term loan rating to Caa2 from B3.

“The multi-notch downgrade reflects Naked Juice's significantly weaker operating performance caused by supply chain disruptions and promotional suspension that resulted in lower market share in the fresh juice category. This hindered Naked Juice's ability to improve earnings and achieve the reduced financial leverage that was necessary to maintain the B1 CFR. The company has reported making some progress to fix these issues,” Moody’s said in a statement.

The agency said it estimates debt to EBITDA will remain very high at 7x-7.25x over the next 12 to 18 months despite dropping from about 7.5x as of LTM September 2022. It also expects free cash flow to be negative $50 million to $75 million during 2023.

The outlook remains stable.

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