S&P raises Del Monte subordinated

Standard & Poor's said it raised its subordinated debt rating on Del Monte Corp. to BB-, the same as the corporate credit rating, from B+, and revised the recovery rating to 3 from 5.

The agency said it removed these issue-level ratings from Creditwatch with positive implications, where it placed them on Oct. 7, following the company's intention to repay debt using net proceeds from the sale of its seafood business.

The company has since determined the final allocation of $305 million of senior secured term loan debt repayment, and in addition, the agency said it affirmed parent Del Monte Foods Co.'s BB- corporate credit rating, and its subsidiary Del Monte Corp.'s BB+ senior secured bank loan ratings.

The outlook is stable.

According to S&P, the ratings on Del Monte reflect moderate debt levels and exposure to volatile commodity costs while the company's diverse product portfolio with leading market shares and high brand recognition in the stable, domestic, shelf-stable fruit and vegetable processing industry and pet food sector offset some of the risk factors.

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