MUMBAI (Thomson Financial) - Standard & Poor's Ratings Services said it
lowered its corporate credit rating on United States-based Smithfield Foods Inc.
to 'BB-' from 'BB+' reflecting weak credit metrics for the rating and S&P's
expectation that credit measures will not rebound to more appropriate levels in
the near term.
S&P also said it assigned a '1' recovery rating to Smithfields' senior
secured notes, indicating expectations of very high 90 percent to 100 percent
recovery in the event of a payment default.
Smithfield faces a challenging operating environment in its hog production
segment through much of fiscal 2009 due to higher feed costs and soft hog
prices, S&P said.
The issue-level rating on the secured notes remains at 'BB+', while ratings
on the company's senior unsecured notes were cut to 'BB-' from 'BB' and assigned
a '4' recovery rating, indicating the expectation of average 30 percent to 50
percent recovery in the event of a payment default.
The ratings remain on credit watch with negative implications where they
were placed on Dec. 3, 2007, S&P said.
TFN.newsdesk@thomson.com
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