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News release

May 8, 2013: Moody’s downgrades Barry Callebaut from Baa3 to Ba1

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March 28, 2013: Standard & Poor's (S&P) downgrades Barry Callebaut to BB+

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Rating reports

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Barry Callebaut has active relationships with Standard & Poor’s and Moody’s. Their current ratings are:

Moody's Ba1/Stable Corporate Family Rating
  Ba1/Stable Senior unsecured notes (EUR 350 m)
S&P BB+/Negative Corporate Credit Rating
  BB+/Negative Senior unsecured bank loan (EUR 850 m)
  BB+/Negative Senior unsecured notes (EUR 350 m)
  4 Recovery rating

Standard & Poors comments:

  • We view Switzerland-based chocolate products supplier Barry Callebaut's financial policy as aggressive because of its ongoing acquisition of Singaporean Petra Foods Ltd.'s cocoa ingredients division and because its credit metrics were already tight for the ratings.
  • We now view the group's financial risk profile as "significant" and our assessment of the business risk profile remains as "satisfactory".
  • We are therefore lowering our long-term corporate credit and issue ratings on Barry Callebaut to 'BB+' from 'BBB-'.
  • The outlook is negative, reflecting our view that there is a one-in-three chance that Barry Callebaut's credit metrics will stay at the very low end of the "significant" category in the coming 18 months.

Moody’s comments:

  • Barry Callebaut’s Ba1 rating reflects the fact that recent acquisitions, infrastructure investments and costs associated with outsourcing contracts have weakened Barry Callebaut’s key credit metrics, which we expect to remain in high-yield territory for the foreseeable future. Further, the Petra transaction -- which the company expects to complete in summer 2013 -- will test Barry Callebaut’s ability to turn around the financial performance of a large business. Barry Callebaut is reliant on politically unstable countries such as Côte d’Ivoire for the supply of cocoa beans. Whilst we recognise that the political situation in Côte d’Ivoire has stabilised since the turmoil in 2011, and that Barry Callebaut has begun diversifying to countries with a more stable political environment such as Malaysia and Indonesia (and Brazil through the Petra acquisition), the company remains significantly exposed to politically unstable countries. This adds to existing supply disruption risks, although these are inherent to the industry.