S&P lowers Smithfield

Standard & Poor's said it lowered its corporate credit rating on Smithfield Foods Inc. to B from BB-.

At the same time, the agency said it removed the ratings from Creditwatch with negative implications where they were originally placed on Dec. 3, 2007, for weak operating performance in its hog production segment.

The outlook is negative.

The agency said that the downgrade reflects weak credit metrics for the rating and its expectation that credit measures will not rebound to more appropriate levels in the near term.

When the agency said it downgraded the company to BB- on June 27, it indicated that it would likely affirm the ratings upon the completion of the divestiture of the company's beef segment to JBS SA (B+/negative).

The company did receive $580 million of proceeds from the sale of Smithfield Beef in October 2008, which was applied to debt reduction under the company's revolving credit facility, S&P noted. However, due to the decline in operating performance in the company's hog production segment, EBITDA margins and credit measures are weaker than it had previously expected.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.