Standard & Poor's Ratings Services lowered its ratings on privately owned regional snack food manufacturer and distributor Tom's Foods Inc, including its corporate credit rating to 'CCC' from 'B'.
At the same time, the ratings were removed from CreditWatch, where they were placed August 20, 2004. The outlook is negative. Standard & Poor's estimates that the Columbus, Ga-based company had about $66.4 million of total debt outstanding at September 11, 2004.
The downgrade reflects Standard & Poor's concerns about Tom's Foods' ability to refinance, in a timely manner, its $17 million revolving credit facility due October 22, 2004, and its $60 million 10.5% senior secured notes due November 1, 2004.
The prior termination date for the revolving credit facility was August 31, 2004, and the company extended this to September 30, 2004, while it worked on a transaction to refinance both the credit facility and notes. The company obtained a subsequent extension through October 22, 2004.
"We will continue to monitor Tom's Foods liquidity position and its ability to meet these obligations when they become due," said Standard & Poor's credit analyst Alison Birch. Complete ratings information is available to subscribers of RatingsDirect, Standard & Poor's Web-based credit analysis system, at www.ratingsdirect.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com; under Credit Ratings in the left navigation bar, select Find a Rating, then Credit Ratings Search.