Fitch: Dole on positive watch

Fitch Ratings said it changed the Rating Watch on Dole Food Co., Inc. and Solvest, Ltd., Dole's wholly-owned subsidiary, to positive from negative.

The ratings on watch include Dole's long-term issuer default rating of B+, asset-based revolver due 2016 rating of BB+ with a recovery rating of RR1, along with a BB+ rating and RR1 recovery rating on its secured term loan B due 2018, BB rating and recovery rating of RR2 on its 13 7/8% third-lien notes due 2014, BB with a recovery rating of RR2 on its 8% third-lien notes due 2016 and B- rating with a recovery rating of RR6 on its 8¾% senior unsecured notes due 2013.

The ratings on watch also include Solvest's long-term issuer default rating of B+ and BB+ rating with a recovery rating of RR1 on its secured term loan C due 2018.

Dole recently announced that it signed a definitive agreement to sell its worldwide packaged foods and Asia fresh produce business to Itochu Corp. for $1.685 billion in cash.

Dole further announced that it will use the majority of the proceeds to pay off debt, the agency said.

In connection with the transaction, Dole will recapitalize its debt structure with new debt that has more favorable terms, Fitch said.

There is heightened probability of an upgrade with the ultimate outcome dependent on Dole's post recapitalization capital structure and leverage, the agency said.

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