Moody's lowers Smithfield Foods

Moody's Investors Service said it downgraded the ratings of Smithfield Foods' senior unsecured debt to Ba3 from Ba2, its senior subordinated notes to B1from Ba2 and its corporate family rating to Ba2 from Ba1.

Moody's said it also affirmed Smithfield's SGL-3 speculative-grade liquidity rating.

The outlook is negative.

The agency noted that the downgrade reflects the deterioration in the company's debt protection measures, caused by a combination of relatively weak operating performance combined with higher debt levels due to heavy debt-financed acquisition activity.

According to Moody's, the negative outlook reflects the challenges Smithfield faces in integrating its recent acquisitions and managing a more complex business portfolio while simultaneously attempting to reduce debt and increase financial flexibility.

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