NEW YORK — Moody’s Investors Service here said concerns over Nash Finch Co.’s military supply business and its independent customer base have prompted the debt-ratings agency to lower its outlook for the company.
The outlook for the Minneapolis-based wholesaler was changed to “negative” from “stable,” reflecting “a lack of progress” in Nash Finch’s efforts to improve its credit metrics.
"We are concerned that the company's EBITDA contribution from its military segment has been pressured because of increased competition," said Mariko Semetko, an analyst at Moody's.
Read more: Moody’s Boosts C&S Outlook
While the military segment has historically provided the company with a source of stability, Semetko said, competitive pressures and the bidding process used by suppliers have reduced profitability.
Moody’s said it downgraded Nash Finch's speculative grade liquidity rating to SGL-3 — indicating “adequate liquidity” — vs. a previous rating of SGL-2, indicating “good liquidity.”
The ratings agency also affirmed Nash Finch’s corporate family rating and probability of default rating at Ba3, signaling the debt is “speculative with substantial credit risk.”
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