S&P rates Universal Robina notes BB

Standard & Poor's said it affirmed its BB corporate credit rating on Philippine-based food company Universal Robina Corp. The outlook is stable.

At the same time, S&P assigned its BB rating to the proposed $100 million senior unsecured notes due 2012. The notes will be issued by URC Philippines Ltd. and unconditionally and irrevocably guaranteed by Universal Robina Corp.

Note proceeds will be partially used to repay Universal Robina's outstanding $53 million notes due December 2006 when they mature.

S&P said the rating on Universal Robina reflects the strong established market position in the Philippines; the company's market leadership; its wide distribution network that covers diverse regions of the Philippines and contributes substantially to its ability to dominate the market; the fact that the company partly manages its accounts directly; and its low-cost structure that supports satisfactory operating margins.

These strengths are offset, S&P added, by the high capital outlay and execution risks in connection with its international growth strategy; earnings exposure to volatile raw material costs and supply, and foreign exchange movements; and financial policy linked with its parent, which has a more aggressive capital structure.

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