S&P's: Tyson Foods 'BBB' Rating Placed On CreditWatch With Negative Implications

(RTTNews) - Standard & Poor's Ratings Services said that it placed its ratings, including its 'BBB' corporate credit rating, on Tyson Foods Inc. (TSN) on CreditWatch with negative implications, meaning that S&P's could lower or affirm the ratings following the completion of its review. Tyson had $1.9 billion in reported debt outstanding as of March 29, 2014.

Tyson's CreditWatch negative listing follows the company's announcement that it submitted a unilaterally binding offer to acquire all of the outstanding shares of Hillshire Brands Co. (HSH) for $63 per share in cash. The offer is valued at about $8.55 billion, and is subject to Hillshire Brands being released from its existing agreement to acquire Pinnacle Foods Inc. (PF).

"If effected, we believe the acquisition will be financed with a combination of debt and equity. Still, we believe debt balances will materially increase, and the degree to which Tyson reduces leverage to levels that support the existing 'BBB' ratings largely depend on the mix of debt and equity (and, to a lesser extent, the degree to which it can capture operating and cost synergies), " said credit analyst Chris Johnson.

Separately, Standard & Poor's Ratings Services maintained its 'B+' ratings on Pinnacle Foods on CreditWatch with positive implications, where they had been placed May 12, 2014.

In addition, Standard & Poor's Ratings Services said its 'BBB' ratings on The Hillshire Brands Co. will remain on CreditWatch with negative implications, where they had been placed May 12, 2014.