S&P: Del Monte unchanged

Standard & Poor's said its ratings and outlook on Del Monte Foods Co. (BB-/negative) remain unchanged following the announcement that the company has entered into an agreement to sell its seafood business, including Starkist, to Dongwon for $363 million, subject to a working-capital adjustment.

The company will apply net after-tax proceeds of about $300 million to debt reduction, the agency said, adding that while it views the debt repayment favorably, it remains concerned about near-term limited covenant cushion on Del Monte's bank credit agreement.

Upon closing, Del Monte will enter into a two-year agreement with Dongwon to provide operational services, the agency noted.

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