Nov 8 - Standard & Poor's Ratings Services raised its issue-level ratings on
B&G Foods Inc.'s $350 million senior unsecured notes due 2018 one notch
to 'B' from 'B-'. We revised the recovery rating to '5', indicating our
expectations for modest (10% to 30%) recovery in the event of a payment default,
from '6', reflecting the company's decrease in priority obligations from debt
amortization. Simultaneously, we raised the preliminary ratings for senior
unsecured debt on B&G's shelf registration for debt securities to 'B' from 'B-'.
The 'B+' corporate credit rating on B&G Foods remains unchanged, as do the
'BB' issue-level ratings on the company's senior secured credit facilities.
The recovery rating on the senior secured credit facilities remains '1',
indicating our expectation for very high (90% to 100%) recovery in the event
of a payment default.
"The rating actions follow our review of our issue-level ratings on B&G Foods'
senior secured credit facilities and unsecured notes following the company's
purchase of New York Style and Old London brands from Chipita America for
$62.5 million and $120 million equity offering," said Standard & Poor's credit
analyst Bea Chiem.
The ratings on B&G Foods Inc. reflect our view of the company's "aggressive"
financial risk profile and "weak" business risk profile. The company's
aggressive financial risk profile reflects its high debt burden and history of
debt-financed acquisitions. Key credit factors considered in the company's
weak business risk profile are its participation in highly competitive end
markets within the packaged food industry and limited geographic diversity
(majority in North America), yet well-recognized brands with good market
positions and generally favorable operating margins.
Temporary contact for Chris Johnson: (1) 973-713-6223.
RELATED CRITERIA AND RESEARCH
-- Corporate Ratings Criteria 2008, April 15, 2008
-- Recovery: Criteria Guidelines for Recovery Ratings on Global
Industrials Issuers' Speculative-Grade Debt, Aug. 10, 2009
B&G Foods Inc.
Corporate credit rating B+/Stable
Senior unsecured notes due 2018 'B' 'B-'
Recovery rating '5'
Senior unsecured debt 'B' (prelim.) 'B-'
Complete ratings information is available to subscribers of RatingsDirect on
the Global Credit Portal at www.globalcreditportal.com. All ratings affected
by this rating action can be found on Standard & Poor's public Web site at
www.standardandpoors.com. Use the Ratings search box located in the left