Moody’s gives Smithfield Foods notes Ba2

Moody's Investors Service said it assigned a Ba2 rating to $400 million of senior unsecured notes being issued by Smithfield Foods, Inc.

Net proceeds will be used to fund the repayment of total outstanding borrowings of $377 million under Smithfield's $1 billion senior unsecured revolving credit facility expiring February 2022 and $275 million accounts receivable securitization facility expiring December 2019.

Other ratings of the company were not affected.

The outlook remains positive.

Moody’s said the Ba2 corporate family rating reflects the company’s large scale and global leadership in hog production, fresh pork and value-added packaged pork products.

“These strengths are balanced against high earnings volatility inherent in the protein processing industry, the company's single-protein concentration and high exposure to commodity-like products (about 50% of total sales),” the agency said in a news release.

“Smithfield's ratings are supported by its relatively stable operating performance and modest financial leverage.”

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