S&P gives Bright Food notes BBB-/cnA-

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. (BBB-/stable/--; cnA-/--) will guarantee the notes.

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

The agency expects Bright Food to use the proceeds to refinance its existing debt.

S&P said the equalization of the issue ratings with the issuer ratings on Bright Food (the guarantor) reflects its view that the guarantee is unconditional and irrevocable and therefore qualifies for rating substitution treatment.

Bright Food’s ratings reflect its strong brand equity and market position as one of the largest food conglomerates in China, its enhanced geographical and product diversity through overseas acquisitions and the company's adequate liquidity position, the agency explained.

These strengths are mitigated by Bright Food's low profitability, high debt leverage, and execution risks from its overseas expansion.

S&P said its assessment that there is a high likelihood of Bright Food receiving sufficient and timely extraordinary government support, if needed, also underpins the company’s ratings.

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