Moody's reviewing Land O'Lakes debt for possible upgrade
March 25, 2010
by Josh Sosland
NEW YORK — Moody’s Investors Service has begun a review of the corporate debt ratings of Land O’Lakes, Inc. for possible upgrade. The review was prompted by the cooperative’s release of financial results for 2009, indicating stable operating performance and progress toward strengthening its balance sheet and financial controls.
Moody’s said its rating of Baa3 remains in effect while the review is conducted, covering about $700 million of senior secured debt securities. The review will focus on the future strategic direction, sustainability of operating profitability and the financial flexibility of the capital structure of Land O’Lakes. In addition Moody’s will look at measures the company has adopted over the past year to shore up its financial controls and risk management practices.
The last Moody’s rating action for Land O’Lakes was in November 2009, when the Baa3 rating was assigned to a new $375 million in senior secured bank revolving credit facility.
Moody’s defines its Baa rated securities as, “Obligations subject to moderate credit risk. They are considered medium-grade and as such may possess certain speculative characteristics.”