S&P rates Pilgrim's Pride loan BBB-

S&P said it assigned a BBB- rating with recovery rating of 1 to Pilgrim's Pride Corp.'s new senior secured credit facility, comprising a $750 million revolver and $800 million term loan.

The 1 recovery rating indicates 90% to 100% expected default recovery.

The new facility is part of a refinancing that will increase the size of the revolver by $50 million and term loan by $300 million, S&P said, as well as extend the maturity of the facility an additional two years to May 2022.

The proceeds from the increased term loan will be used to pay down the existing revolver.

The agency said it will withdraw the ratings on the existing revolver and term loan following the completion of this transaction.

Pilgrim's Pride is considered a highly strategic subsidiary of its parent company, Brazilian protein processor JBS SA, S&P explained.

The agency said it believes Pilgrim's Pride could increase its leverage closer to 2x for possible future acquisitions and will sustain its EBITDA performance into 2017, given the still-favorable outlook for the U.S. poultry industry.

The industry is benefiting from strong demand, rising exports, relatively low feed costs and a low risk of overproduction in the near term, S&P said.

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