Standard & Poorâs raised its corporate credit rating on Fresh Del Monte Produce Inc., Coral Gables, Fla., one notch higher in the junk category and said it has a positive outlook, according to the ratings agency.
S&P raised its rating to "BB from BB-" on Aug. 24, and the rating is now just two notches into non-investment grade status, according to The Associated Press. The rating agency said in a statement that Del Monte has âa strong liquidity profile and has improved its financial risk profile.â
According to S&P, Del Monte successfully refinanced its revolving credit facility due in November, and a $100 million term loan due in 2011. As of July 17, about $166.6 million was available under a new $500 million revolving credit line that matures in 2013.
Though Fresh Del Monte is the No. 1 marketer of fresh pineapples worldwide, and the No. 3 marketer of bananas worldwide, S&P said product concentration remains a rating concern because of the high sales and earnings concentration from bananas and pineapples and intense competition in those markets.
âWe assume Fresh Del Monte will maintain credit measures that are stronger than its rating category to compensate for inherent volatility in the produce industry,â S&P said in its statement. âWe could consider an upgrade if the company can sustain improved credit measuresâ and a âprudent financial policyâ regarding acquisitions.