NEW YORK — A debt-to-EBITDA ratio above 5 is central among reasons Moody’s Investors Service has assigned a B1 corporate family credit rating to Hostess Brands L.L.C., Kansas City. The outlook for Hostess is stable, Moody’s said.

The rating was assigned to a $100 million senior secured revolving credit facility due in 2024 and $984 million first lien term loan due in 2025. The two facilities replaced the company’s existing credit arrangements under Hostess Holdco, L.L.C.

B family ratings are “considered speculative and are subject to high credit risk,” Moody’s said.

The company’s 5.3x debt-to-EBITDA ratio is reflected in the rating, together with the company’s concentration in the low-growth snack cakes category, its “moderate scale” as a consumer packaged goods company and headwinds from rising freight and commodity costs.

“The rating also reflects Hostess’ well-known portfolio of snack cake brands, high profit margins, good cash flows and very good liquidity,” Moody’s said. “The rating further reflects continued upside potential from the Cloverhill acquisition in 2018.”

The company’s strong operating performance is reflected in the stable rating, with Moody’s anticipating EBITDA in excess of $200 million in 2020. If those expectations are met, the Hostess debt-to-EBITDA ratio should decline beneath 5x.

The ratings agency said Hostess could be subject to a downgrade if its operating performance fails to meet expectations or if the company pursues acquisitions financed with debt.

“The rating could be upgraded if Hostess continues to successfully grow revenues, maintains stable solid operating performance, improves earnings diversity and sustains debt to EBITDA below 4x while maintaining good liquidity,” Moody’s said.