S&P Boosts Corp. Rating on Pinnacle Foods (PF) to 'BB-';Notes Continued Debt Reduction

Standard & Poor's Ratings Services raised its corporate credit rating on Parsippany, N.J.-based Pinnacle Foods (NYSE: PF) to 'BB-' from 'B+.' Concurrently, we raised the senior secured issue level-ratings one notch to 'BB+' from 'BB'. The recovery ratings remain '1', indicating our expectations for very high (90% to 100%) recovery in the event of a payment default. We also raised the issue-level ratings on the company's senior unsecured notes to 'B' from 'B-'. The recovery ratings remain '6', indicating our expectations for negligible (0% to 10%) recovery in the event of a payment default. The outlook is stable.

"The upgrade reflects Pinnacle's continued debt reduction and our belief that its financial policy will be less aggressive given that the company is no longer majority owned by a financial sponsor," said Standard & Poor's credit analyst Bea Chiem.

We estimate as of Sept. 28, 2014, Pinnacle had roughly $2.4 billion in lease- and pension-adjusted debt outstanding.

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