Standard & Poor's assigns B+ corporate credit rating to Post Holdings; BB rating assigned to cereal maker's US$350M senior secured credit facilities

NEW YORK , February 7, 2012 (press release) – Standard & Poor's Ratings Services today assigned its 'B+' corporate credit rating to St. Louis-based Post Holdings Inc., a manufacturer of ready-to-eat (RTE) cereal.

We assigned our 'BB' issue-level ratings to Post's $350 million senior secured credit facilities, which consist of a $175 million revolving credit facility and $175 million term loan A, both of which are due in five years. The recovery rating on these facilities is '1', indicating our expectation for very high (90% to 100%) recovery in the event of a payment default.

We also assigned our 'B+' issue-level ratings to Post's $775 million senior unsecured notes due 2022. The recovery rating is '4', indicating our expectation for average (30% to 50%) recovery in the event of a payment default. We understand that net proceeds from the financing were used to fund a dividend to Ralcorp Holdings Inc., to retain cash on Post's balance sheet, and to cover fees and expenses. The outlook is stable. "The ratings reflect our view of Post's narrow product portfolio, participation in the highly competitive ready-to-eat cereal category, exposure to volatile commodity costs, and limited brand and geographic diversity," said Standard & Poor's credit analyst Bea Chiem.

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