General Announcement::S&P Global Ratings raised Del Monte Pacific's US subsidiary, Del Monte Foods', rating to B from B-

Issuer & Securities

Issuer/ Manager
DEL MONTE PACIFIC LIMITED
Securities
DEL MONTE PACIFIC LIMITED - VGG270541169 - D03
Stapled Security
No

Announcement Details

Announcement Title
General Announcement
Date &Time of Broadcast
15-Oct-2021 17:35:52
Status
New
Announcement Sub Title
S&P Global Ratings raised Del Monte Pacific's US subsidiary, Del Monte Foods', rating to B from B-
Announcement Reference
SG211015OTHR8QBV
Submitted By (Co./ Ind. Name)
Antonio E S Ungson
Designation
Company Secretary
Description (Please provide a detailed description of the event in the box below)
In its report, S&P stated that:

"U.S.-based Del Monte Foods Inc. continues to demonstrate improvement in operating performance, achieving 11% revenue growth and higher profitability in its first fiscal quarter that led to an improvement in leverage to about 3.5x for the 12 months ended Aug. 1, 2021, from about 10x in the same period the previous year.

We believe the company will sustain leverage under the mid-5x area and that it has the ability to generate positive free cash flow.

As a result, we raised our issuer credit rating on Del Monte to 'B' from 'B-'. We also raised our issue-level rating on its debt to 'B' from 'B-'. The recovery rating remains '3', indicating our expectation for meaningful (50%-70%; rounded estimate: 65%) recovery in the event of a default.

The stable outlook reflects our forecast for strong revenue growth and our expectation that the company will be able to offset inflation headwinds with productivity and pricing actions such that leverage will be in the low-3x area in fiscals 2022 and 2023. We also expect at least break-even free cash flow generation in 2022 and above $50 million in 2023."

Please refer to the attached for the full report from S&P.

Attachments

SP_ResearchUpdate_DelMonte_Oct2021_Final.pdf
Total size =123K