Moody’s upgrades FAGE

Moody’s Investors Service said it upgraded FAGE International SA’s corporate family rating to Ba3 from B1, its probability of default rating to Ba3-PD from B1-PD and the backed senior unsecured notes due 2026 it co-issued with subsidiary Fage USA Dairy Industry, Inc. to Ba3 from B1.

“The rating upgrade is mainly attributed to the successful completion of the announced tender offer for $107 million of its remainder $288 million backed senior unsecured notes maturing in 2026. The tender offer was funded using a portion of the company's significant cash on balance sheet, which amounted to $169 million as of June 2023. Furthermore, the tender offer builds upon the previous buyback and cancellation of approximately $132 million in bonds completed between 2020 and 2021. As a result, the company's total outstanding financial debt has been reduced to only $181 million,” Moody’s said in a press release.

Moody’s also pointed out FAGE widened its gross profit margin to about 46% from 31% in 2022 benefitting from its price increases and cheaper milk prices.

The outlook is stable.

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