S&P: Del Monte on watch

Standard & Poor's said it placed the BB corporate credit rating and other ratings on Del Monte Foods Co., and subsidiary Del Monte Corp., on CreditWatch with negative implications.

The watch placement follows reports that Del Monte may be subject to a takeover by a private equity firm, S&P said.

The agency said a meaningfully debt-financed transaction would weaken Del Monte's credit protection measures below current levels, which include lease and pension adjusted total debt-to-EBITDA of about 2.6x, the agency said.

S&P said it will consider a downgrade if leverage weakens to near 4x. The CreditWatch will be resolved when more information regarding a potential transaction and financing becomes available, the agency said.

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