S&P downgrades Chiquita, lifts revolver

Standard & Poor's said it lowered Chiquita Brands International Inc.'s corporate credit rating to B- from B, its $368 million term loan C to B with a recovery rating of 2 and its senior unsecured notes to CCC.

The agency also raised Chiquita's $200 million revolving credit facility to B+ with a recovery rating of 1.

The ratings were removed from CreditWatch with negative implications, where they were placed on May 2 following weak first-quarter operating results due to high purchased fruit and other industry costs and lower local banana prices in Europe. The outlook is negative.

"The downgrade follows Chiquita's recent second-quarter earnings release and reflects continued deterioration in operating performance and credit measures, and weak covenant cushion," S&P credit analyst Alison Sullivan said in an agency rating.

The improved recovery on the revolver reflects repayment of the term loan B, under which $24 million was outstanding as of March 31, and $90 million of mortgage debt related to shipping assets that were recently sold, S&P said.

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