NEW YORK — A B3 credit rating has been assigned by Moody’s Investors Service to a proposed $1 billion in debt to be issued by Post Holdings, Inc. Net proceeds from the offering of 10-year senior unsecured notes will be used to redeem $640 million of existing debt due in 2022 and to fund part of a pending acquisition of Bob Evans Farms, Inc.
St. Louis-based Post on Sept. 19 announced plans to acquire Bob Evans for $1.6 billion. Two months earlier, Post closed on its acquisition of United Kingdom-based Weetabix for $1.8 billion.
Moody’s said its rating is premised on an anticipated debt-to-EBITDA ratio of about 6.5 times. Going forward, debt should be reduced by “at least a half-turn per year” with earnings growth and voluntary repayments against a $2 billion senior secured loan due in 2024, Moody’s said.
Considered speculative and subject to high credit risk, a B3 rating is Moody’s lowest rating ahead of Caa, on obligation considered to be “of poor standing.”