S&P downgrades Moy Park, notes to BB-

S&P said it lowered its long-term corporate credit rating on Moy Park Holdings Europe to BB- from BB.

The outlook is stable.

At the same time, the agency lowered its issue ratings on the existing £300 million senior unsecured notes due 2021 to BB- from BB. The recovery rating is unchanged at 3, reflecting an expectation of average (50%-70%) recovery in the event of a payment default.

Brazil-based meat processor JBS SA owns Moy Park. Its liquidity position has weakened to less-than-adequate following two consecutive quarters of cash drain caused by poor working capital management, lower-than-estimated operating cash flows and the liquidation of derivative positions, S&P said. JBS' financial flexibility has diminished – it still has sizable short-term maturities and is finding hard to restore its margins at the group's main businesses, such as the U.S. beef and Brazilian poultry operation at Seara.

As a result, S&P said it downgraded JBS to BB and revised the group credit profile to bb. The group credit profile forms the basis for the agency’s assessment of the group support available to Moy Park.

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