S&P: Bright Food notes BBB-

S&P said it assigned a BBB- long-term issue rating and cnA- long-term Greater China regional scale rating to a proposed issue of euro-denominated senior unsecured notes by Bright Food Singapore Holdings Pte. Ltd.

Bright Food (Group) Co., Ltd. will guarantee the notes.

Bright Food Singapore is a wholly owned subsidiary of Bright Food and holds a 76.7% stake in Tnuva Food Industries Ltd.

The proceeds will be used to refinance existing debt, S&P said.

The rating on the notes was equalized with the company’s corporate credit rating to reflect the company’s unconditional and irrevocable guarantee, which qualifies for rating substitution treatment, the agency said.

The rating also considers an expectation that Bright Food’s extensive geographical diversification of assets, as well as some degree of business diversification, could reduce structural subordination risk associated with debt at the holding company level, S&P said.

The notes will rank equally with all other senior unsecured debt of Bright Food, the agency said.

The ratings also reflect the company’s strong brand equity and market position as one of the largest food conglomerates in China, S&P said.

The strengths are mitigated by the company’s low profitability, high debt leverage and execution risks from its overseas expansion, the agency said.

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