Moody's: Pierre Foods on review

Moody's Investors Service said it placed under review for downgrade Pierre Foods, Inc.'s corporate family and probability-of-default ratings of B3.

Also on review are the B2 ratings on the company's $40 million senior secured revolving credit facility maturing 2009 and $227 million senior secured term loan facility maturing 2010 as well as its $125 senior subordinated notes maturing 2012 at Caa2.

Moody's lowered the speculative grade liquidity rating to SGL-4 from SGL-3 based on its expectation that weak profitability will challenge the company's ability to comply with financial covenants over the next 12 months.

The review reflects Moody's concern that Pierre will be unlikely to improve weak credit metrics and boost profit margins given the high costs of the company's commodity raw materials such as chicken and cheese, according to the agency.

For the 12 months ended Dec. 1, the issuer's debt-to-EBITDA ratio was 8.8 times.

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