Premier Foods Moody’s rating withdrawn

By Dan Colombini

- Last updated on GMT

Moody's has withdrawn Premier's credit rating
Moody's has withdrawn Premier's credit rating
Premier Foods has had its credit rating with investor service firm Moody’s withdrawn just two weeks after securing a new refinancing package with its lenders.

Moody’s confirmed that it had now withdrawn Premier’s rating after yesterday’s announcement that it had downgraded the firm from the B2 corporate family rating to B3 status.

The firm said it had made the decision “for its own business reasons".

But speaking yesterday, lead Premier analyst at Moody’s, Douglas Crawford revealed that Premier had been downgraded amid further concerns for its on-going financial status.

Weak operating performance

He said: “The downgrade of Premier Foods' CFR to B3 reflects the weak operating performance for 2011 and the additional debt expected to be brought on the balance sheet following the completion of the refinancing deal.

“The negative outlook reflects Moody's concerns about the effects of the weak UK consumer environment and high promotional activity in the sector​.”

On March 12, Premier announced the details of its long-awaited deal with its banks, which provided the firm with some much-needed breathing space after a difficult 2011.

Under the terms of the package, banking facilities of £1.2bn have been extended from December 2013 to June 2016. Covenants have also been re-set to reflect the group’s growth priorities of focusing investment behind eight Power Brands, reducing its costs and its disposals programme, according to the firm.

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