The company is specifically seeking a $300m first-in, last-out (FILO) loan, sources said. It purports to have roughly $400m in assets that are collateral to its existing revolver but have not been borrowed against given limitations in that facility’s borrowing base, according to sources.

Del Monte Foods is a California-based provider of branded food products such as canned fruits and vegetables as well as other snacks.

In February, Moody’s downgraded its corporate family rating to Caa1, citing a heavy debt load and weak liquidity. The latter was constrained by a glut of high-cost inventory last year, while sales and EBITDA were hit by an inflation-driven pullback in consumer spending and high labor costs, the ratings agency said.

As of 29 October 2023, Del Monte Foods had $708m drawn on its ABL facility due 2027 and $18m available, Moody’s said. Its cash balance at that time was $3m.

The company’s cash on hand has since dwindled to $1.92m as of 28 January 2024, according to its limited public financial results.

It posted $12.04m in adjusted EBITDA for its Q3 2024 (ended January 2024), compared to $46.9m a year prior.

Del Monte Foods’ $725m in SOFR+425bps first lien term loan due 2029 is quoted at 84.17, down from 92.75 at the beginning of this year.

Del Monte Foods is owned by Singapore-listed Del Monte Pacific, which is in turn majority owned by Philippines-based NutriAsia Pacific Limited.

Del Monte Foods and NutriAsia Pacific Limited did not respond to requests for comment. PJT Partners declined to comment.

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