Fitch Publishes Fourth Edition of U.S. High-Yield Consumer Handbook

CHICAGO--(BUSINESS WIRE)-- Fitch Ratings today published its fourth edition of the 'U.S High-Yield Consumer Handbook', which provides a comprehensive analysis of major companies in the leveraged high-yield food, beverage, tobacco, restaurant and consumer products companies.

The report contains a compilation of U.S. consumer sector themes, an overview of credit fundamentals, and profiles of 15 high-yield issuers with an aggregate debt of approximately $50 billion. Each company report includes Fitch's assessment of the business and financial profile, including key forecast assumptions for 2015 and 2016, and detailed debt structure, debt organizational chart and covenant analyses.

Revenue trends are diverging across the consumer sector. Traditional packaged food volume is declining as fresh, natural and organics, and specialty foods become mainstream. Consolidated revenues for multinational issuers, particularly in the consumer products space, will be meaningfully hampered by negative FX translation in 2015. Conversely, the restaurant and foodservice industry is benefiting as consumers dine out more due to higher consumer discretionary income, resulting from lower unemployment, increasing hourly wages and lower gas prices.

Merger and acquisition activity remains strong due to a search for growth, low interest rates, improved balance sheets, and a rebalancing of holdings by private equity sponsors. Fitch expects assets to be readily available for purchase, mainly from large food companies divesting non-core brands to maximize value as multiples are attractive. Post Holdings, Inc. and Spectrum Brands, Inc. have recently announced deals while Pinnacle Foods Inc. (Pinnacle) and Jarden Corporation will remain likely acquirers.

Deteriorating Credits: Credit protection measures for Avon Products, Inc. and Weight Watchers International, Inc. are deteriorating due to negative operating trends. The business model for both firms is being challenged, market share losses are continuing, and the firms have not been able to stabilize performance.

Improving Credits: Credit trends are improving for Dean, Pinnacle and Constellation Brands, Inc. (Constellation) due to debt reduction, lower input costs, or strong operating fundamentals. Financial strategies for Aramark, Bloomin' Brands, Inc. (BLMN), and for Restaurant Brands International, Inc. entail deleveraging with possible upside to the credit profiles for Aramark and BLMN.

The following companies are profiled in the report:

ACCO Brands Corporation

Alliance One International Inc.

Aramark

Avon Products, Inc.

Bloomin' Brands, Inc.

Constellation Brands, Inc.

Dean Foods Company

Jarden Corporation

Keurig Green Mountain, Inc.

Pinnacle Foods Inc.

Post Holdings, Inc.

Restaurant Brands International Inc.

Revlon Consumer Products Corporation

Spectrum Brands, Inc.

Weight Watchers International Inc.

The full report 'U.S. High-Yield Consumer Handbook' is available at www.fitchratings.com.

Additional information is available at 'www.fitchratings.com'.

U.S. High-Yield Consumer Handbook (Comprehensive Analysis of High-Yield Food, Beverage, Tobacco, Restaurant)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867362

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View source version on businesswire.com: http://www.businesswire.com/news/home/20150629005789/en/

Fitch Ratings
Monica Aggarwal
Managing Director
+1-212-908-0282
Fitch Ratings, Inc.
33 Whitehall St.
New York, NY 10004
or
Media Relations:
Alyssa Castelli, +1 212-908-0540
[email protected]

Source: Fitch Ratings

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