Moody's changes Gold Kist view to developing

Moody's Investors Service said it affirmed the B2 rating on the $130 million 10¼% senior unsecured notes, the B1 corporate family ratings and the SGL-2 speculative grade liquidity rating for Gold Kist, Inc. but changed the outlook to developing from stable.

This follows the announcement that Pilgrim's Pride Corp. has made an offer to acquire Gold Kist for about $1 billion in cash plus the assumption of $144 million in Gold Kist debt.

The change in outlook to developing from stable reflects the uncertainty surrounding Gold Kist's future ownership and financial strategy following the Pilgrim's Pride acquisition bid. While it remains highly uncertain whether an acquisition by Pilgrim's Pride will be consummated, the highly publicized bid could initiate increased shareholder pressure on Gold Kist's management to take actions to improve shareholder returns, the ratings agency said.

The affirmation of the company's SGL-2 speculative grade liquidity rating reflects the company's good liquidity and the expectation that internal cash flow, cash balances and committed bank credit availability are sufficient to cover all of the company's cash needs over the coming year.

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