Moody's rates Smithfield Foods add-on Ba2

Moody's Investors Service said it assigned a Ba2 rating to Smithfield Foods Inc.'s $200 million add-on to its 7% senior unsecured notes due 2011.

Moody's also affirmed Smithfield's Ba1 senior implied, Ba2 senior unsecured and Ba3 subordinated note ratings, as well as its SGL-2 speculative grade liquidity rating. The outlook is stable.

The add-on to the senior unsecured notes were sold at a premium, and proceeds will repay revolver outstandings and create additional liquidity that would be available for general corporate purposes, including acquisitions and investments.

Moody's said Smithfield's ratings reflect its leading market position in hog production and pork processing and the diversity gained from its beef, turkey and international operations, but are limited by the company's exposure to cyclical commodity markets and its high debt levels.

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