S&P upgrades Smithfield Foods

Standard & Poor's said it raised the corporate credit rating on Smithfield Foods Inc. to BB from BB-.

The outlook is stable.

S&P also raised the issue-level ratings on the company's senior secured debt to BBB- from BB+ with an unchanged recovery rating of 1, indicating the expectation for very high (90%-100%) recovery in the event of a payment default.

In addition, S&P raised the issue-level ratings on the company's senior unsecured debt to BB from BB- with an unchanged recovery rating of 3, indicating the expectations for meaningful recovery (50%-70%) in the event of a payment default.

"The upgrade reflects our opinion that Smithfield's business risk profile has improved, in part because of better industry fundamentals, but also because we believe the company has adopted a more prudent approach to managing earnings volatility, including reducing its exposure to volatile agricultural commodity costs like corn," S&P credit analyst Chris Johnson said in a news release.

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