Fitch applies BBB to Smithfield Foods

Fitch Ratings said it assigned an issuer default rating of BBB to Smithfield Foods, Inc.

The outlook is stable.

Fitch said the ratings benefit from a one-notch upgrade from Smithfield's stand-alone credit profile due to the agency’s view of a moderate parent-subsidiary linkage.

Smithfield is 100% owned by WH Group, Inc., which Fitch rates BBB+/stable.

The stand-alone credit profile of BBB- reflects the company's leading position in the global pork industry, growing mix of higher-margin packaged meats, and reduced financial leverage. These positives are balanced against the lack of diversity across other proteins, higher potential earnings volatility than larger more diversified peers, and that dividends could constrain on-going FCF, Fitch explained.

© 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.