S&P assigns Del Monte notes BB-

Standard & Poor's said that it assigned its BB- rating to Del Monte Corp.'s proposed issue of $450 million senior subordinated notes due Oct. 15, 2019.

The recovery rating is 4, the agency said, adding that the company will use the proceeds from the note issuance, together with cash on hand or borrowings under its revolving credit facility, to repurchase its outstanding $450 million of 8.625% notes due 2012, and to pay related fees and expenses.

S&P said it will withdraw the existing ratings on the 2012 notes when they are repaid.

At the same time, the agency said it revised the recovery rating on the existing BB- senior subordinated debt to 4, indicating its expectation for average recovery in the event of a payment default, from 3.

According to S&P, the ratings on Del Monte reflect moderate debt levels and exposure to volatile commodity costs.

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