Moody's upgrades Flowers credit rating

by Josh Sosland
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NEW YORK — Moody’s Investors Service on March 7 upgraded the senior unsecured debt rating of Flowers Foods, Inc. to Baa2 from Baa3. The Thomasville, Ga.-based baking company’s continued stable operating performance, conservative financial policy, measured territory expansion and strong debt protection measures prompted the upgrade, Moody’s said. The agency also credited Flowers’ ability to widen its operating margins and earnings in the face of rising input costs. A number of steps allowed the company to keep boost its margins — improved operating efficiency and product mix shift, higher pricing and effective hedging, Moody’s said. With the upgrade, Flowers’ credit was given a stable outlook reflecting Moody’s belief that the baking company "should be able to sustain reasonably stable operating performance in spite of increasing commodity costs and assumes that Flowers will continue to maintain a conservative capital structure and financial policy." Flowers has a $250 million 5-year senior unsecured revolving bank loan facility that expires in October 2012. As of Dec. 29, 2007, there were no outstanding borrowings under this facility.

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