S&P cuts Chiquita notes, rates loan BB-

Standard & Poor's said that it assigned Chiquita Brands International Inc.'s proposed $400 million senior secured credit facilities, consisting of a $150 million revolving credit facility and a $250 million term loan, a preliminary BB- issue-level rating with a recovery rating of 1, indicating very high (90% to 100%) recovery in the event of a payment default.

The company intends to use the proceeds from these new facilities to refinance its existing $310 million senior secured credit facilities and to partially fund a tender offer for $100 million of the outstanding $177 million of 8 7/8% senior notes due 2015.

S&P lowered the issue-level ratings for the senior unsecured notes to B- from B and revised the associated recovery ratings to 5 from 4.

The outlook is stable.

The ratings consider Chiquita's vulnerable business risk profile and highly leveraged financial risk profile, the agency added.

The ratings consider the company's high debt leverage and participation in the competitive, commodity-oriented, seasonal and volatile fresh produce industry, S&P said.

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