Moody’s raises Smithfield Foods, debt

Moody's Investors Service said it upgraded Smithfield Foods, Inc.’s and its subsidiaries’ corporate family rating to Ba2 from Ba3, probability of default rating to Ba2-PD from Ba3-PD and senior unsecured debt ratings to Ba3 from B1.

The speculative grade liquidity rating was affirmed at SGL-1.

The outlook is stable.

Moody’s said the upgrades reflect its expectation that Smithfield will maintain solid credit metrics and relatively stable operating performance.

"Stronger earnings and modest debt levels over the past year have resulted in declining financial leverage, including debt/EBITDA that is likely to fall below 2.5 times within six to nine months," Moody's senior credit officer Brian Weddington said in a news release.

The agency’s forecast includes the effect of $400 million of dividends expected to be distributed in fiscal 2016.

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