Fitch comments on Iglo sale

Fitch Ratings said Birds Eye Iglo will need to start considering options to address its 2013 and 2014 refinancing needs if the company's potential sale does not go through. The agency rates Iglo Foods Midco Ltd., the rated entity of the group, B+ with a stable outlook.

Iglo's owner, Permira, has appointed advisers to explore possible sale options. In the agency's view, the potential sale or initial public offering is driven more by Permira's desire to finally realize a profit on its investment than any refinancing pressure.

Iglo's undrawn revolving credit facility and the relatively small unamortized portion of its term loan A mature in October 2013. As it stands, Iglo could cover its 2013 maturities with balance sheet cash, Fitch said, but the agency believes the company will need to lock in refinancing before its term loan B matures in 2014.

"A sale now makes sense," the agency said. "The financial markets are generally more optimistic than they were three months ago. This should boost the company's valuation and help make both equity and debt financing easier."

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