S&P: Chiquita outlook negative

Standard & Poor's said it affirmed Chiquita Brands International Inc.'s B corporate credit rating, CCC+ senior unsecured debt rating and the B rating on the senior secured debt issued by Chiquita Brands LLC.

The ratings were removed from CreditWatch with negative implications following Chiquita's receipt of an amendment to its credit facility to relax covenants over multiple quarters, and the outlook is negative.

The agency said the ratings reflect Chiquita's weak credit measures, product concentration in bananas and the company's participation in the mature fruit and vegetable industry, which faces uncontrollable factors such as global supply, world trade policies, political risk, currency swings, weather and disease. The company is also highly leveraged; it had about $1.2 billion in consolidated lease-adjusted total debt outstanding at Sept. 30 and for the 12 months ended Sept. 30, lease-adjusted total debt to EBITDA was close to 6.5x, compared with 4x at the end of December 2005.

The ratings are supported by the company's position as a leading producer, marketer and distributor of bananas and other fresh and processed foods, its No.1 banana market position in Europe and its No. 2 position in North America.

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