NEW YORK — Moody's Investors Service here said this week it was upgrading Nash Finch Co.'s debt ratings to B1 from B2 and its convertible senior subordinated notes to B3 from Caa1, adding that the ratings outlook remains positive.
Moody's said the upgrades reflect the distributor's "relatively stable operating performance and solid credit metrics, despite the ongoing challenging economic environment. The positive ratings outlook reflects the expectation the company will maintain good liquidity, conservative financial management and solid credit metrics while continuing its growth strategy and modest returns to shareholders."
According to Moody's, Nash Finch's military distribution segment has offset some weakness in the company's food distribution and retail segments, although at a lower gross profit margin. To get a ratings upgrade would require "material and sustained margin improvement while maintaining credit metrics near current levels and good liquidity," Moody's said.
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