Moody’s Downgrades Whole Foods’ Debt

NEW YORK — Moody’s Investors Service here on Friday lowered its rating on the debt of Whole Foods Market following the natural food retailer’s acquisition of rival Wild Oats Markets. In downgrading the “corporate family” debt rating to Ba1 from Baa3, Moody’s cited deterioration in Whole Foods’ debt protection measures. The company’s debt-to-EBITDA ratio will increase to 5.2:1 from 4.0:1, and the acquisition will also “place further strain on the company’s already negative free cash flow,” Moody’s said. Moody’s also cited the challenges of integrating the acquired company while at the same time executing an accelerated rollout of new stores. It was the second agency to downgrade the debt post-merger, following Standard & Poor’s similar action last month.

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