DISTRESSED DAILY: Dessert Seller’s Credit Metrics Not So Sweet

Dessert Holdings, a private-equity backed seller of frozen cheesecakes and other sweets, has been binging on acquisitions to the detriment of its credit metrics, according to Moody’s Investors Service.

The credit grader dropped Dessert’s rating further into junk on Wednesday, citing weaker-than-expected operating performance, high leverage and tight liquidity following a pair of acquisitions last year. Moody’s expects liquidity to be “very tight” in the first half of 2023 before earnings recover over the next 12 to 18 months.

The St. Paul-based company said it bought gourmet dessert maker Steven Charles in early 2022, then purchased Dianne’s Fine Desserts ...