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Performance Food Group Notes Upgraded by Moody's on Debt Reduction
Moody's Ratings has upgraded Performance Food Group's (NYSE: PFGC) senior unsecured notes to Ba3 from B1, reflecting the company's progress in paying down debt. The ratings agency affirmed the food distributor's Ba2 corporate family rating (CFR) and maintained a stable outlook on Monday.
Rationale for the Upgrade
The upgrade to the senior unsecured notes was primarily driven by a significant paydown of borrowings under Performance Food's asset-based revolving credit facility, according to Moody's. This reduction in secured debt improves the expected recovery rates for the company's unsecured noteholders in a potential default scenario.
The agency's affirmation of the Ba2 CFR reflects Performance Food's solid operating performance and consistent deleveraging since its 2024 acquisition of Cheney Brothers. The speculative grade liquidity rating remains at SGL-2.
Improving Financial Metrics
Performance Food has demonstrated strengthening credit metrics, a key factor in the ratings action. For the fiscal year ending in June 2026, the company's financial performance included:
Ad- Revenue growth across all three of its business segments.
- A Moody’s-adjusted debt-to-EBITDA ratio that declined to 4.1x, down from 4.6x in the prior year.
- An EBITA-to-interest expense ratio that stood at 2.6x.
Looking ahead, Moody's forecasts continued improvement over the next 12 to 18 months. The agency expects the debt/EBITDA ratio to fall to approximately 3.5x and the EBITA/interest coverage to rise to 3.2x, supported by further debt repayment, volume growth, and procurement synergies.
Company and Market Context
Performance Food's credit profile is supported by its significant scale and market position as one of the top three distributors in North America's relatively recession-resilient food distribution industry. The company has more than tripled its revenue and EBITDA since its fiscal year ending June 2019 through a combination of organic growth and acquisitions.
According to the report, Performance Food has stated that deleveraging remains a strategic priority. The company's own reported leverage stood at 3.5x as of its 2026 fiscal year-end.
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