Moody’s downgrades Upfield

Moody’s Investors Service said it downgraded Sigma Holdco BV’s (Upfield), corporate family rating to B2 from B1 and its probability of default rating to B2-PD from B1-PD.

Concurrently, Moody’s lowered to B2 from B1 the ratings on the €4.328 billion guaranteed senior secured first-lien term loan facility due in July 2025 and the €700 million guaranteed senior secured first-lien revolving credit facility due in January 2025, borrowed by Upfield BV and Sigma US Corp, and to Caa1 from B3 the ratings on the €685 million guaranteed senior unsecured notes and the $525 million guaranteed senior unsecured notes due in May 2026, issued by Sigma Holdco.

“The downgrade reflects our view that substantial restructuring costs and lower than expected cash generation will result in prolonged weakness in Upfield’s credit metrics, which are no longer commensurate with the existing B1 rating category,” said Paolo Leschiutta, a Moody’s senior vice president and lead analyst for Upfield, in a press release.

Moody’s also changed the outlook to stable from negative for both entities.

“The stable outlook recognizes the strong business profile of the company and our expectation that cash generation will turn positive next year. However, the rating is weakly positioned and failure to demonstrate improvement in key credit metrics and liquidity over the next six to 12 months could result in further downward pressure,” added Leschiutta.

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