S&P: Del Monte unchanged after $100 million add-on

Standard & Poor's said the B rating on Del Monte Corp.'s senior secured term loan due in 2018 remains unchanged following the company's $100 million add-on and amendment to this facility.

The recovery rating on the senior secured term loan remains 3, indicating 50% to 70% expected default recovery.

The B corporate credit rating also remains unchanged.

As well as adding a drawn $100 million commitment to the term loan, the second amendment reduced pricing by lowering the Libor floor to 1% from 1.5% and added a lower leverage-based LIBOR spread of 2.75% if debt-to-EBITDA falls below 5.75x.

Prior to the amendment, the facility had a fixed 3% Libor spread.

The ratings reflect the company's fair business risk profile and highly leveraged financial risk profile, S&P said.

Key credit factors considered in assessing Del Monte's business risk profile include its participation in the highly competitive packaged produce and pet food market segments, exposure to volatile commodity costs, limited customer and geographic diversification and the seasonality of its business, the agency said.

These factors are partially offset by the company's good product diversity within its business segments, S&P said, and portfolio of well-known brands.

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