Moody’s Rating Action One Notch Down for Barry Callebaut to Ba1

09 May 2013 ---- Barry Callebaut, the world’s leading manufacturer of high-quality cocoa and chocolate products, has announced that Moody’s Investors Service, assigned a Ba1 corporate rating to Barry Callebaut AG, down from Baa3. The rating outlook is stable.

At the same time, the rating on the senior unsecured notes is Ba1 in line with the corporate credit rating.
 
According to Moody’s, the downgrade reflects that the acquisition of Singapore-based Petra Foods Ltd.'s Cocoa Ingredients Division has a negative impact on key metrics and financial flexibility of Barry Callebaut, given the acquisition is financed predominantly with debt.
 
Barry Callebaut will finance the acquisition through a combination of new equity for an equivalent amount of USD 300 million and a USD 600 million Rule 144A/Reg S USD bond offering.
 
Following the downgrade from Standard & Poor’son March 28 2013, Victor Balli, CFO of Barry Callebaut, said: “After achieving investment grade by Moody’s  two years ago, we expected and communicated in December 2012 a potential downgrade based on the acquisition of Petra Foods' Cocoa Ingredients Division and related rating metrics. We are convinced of the strategic long-term value of this important strategic acquisition and, based on our long-term strategy, we will continue to invest in future growth. Despite such investments might temporarily affect our profitability, balance sheet ratios and cash generation, we are fully committed to go back to investment grade within the next few years.”