S&P affirms CTI Foods, rates loans B+, B-

Standard & Poor's said it affirmed its B+ corporate credit rating on CTI Foods Holding Co. LLC.

In addition, the agency said it assigned bank loan and recovery ratings to the company's proposed $210 million secured bank financing, which includes a $40 million revolver due 2012, $135 million first-lien term loan B due 2013, excluding an incremental facility of $20 million, and $35 million second-lien term loan due 2014.

The first-lien term loan was rated B+, the same as the corporate credit rating, with a recovery rating of 2, S&P said, adding that the second-lien debt was rated B-, two notches below the corporate credit rating, with a 5 recovery rating.

At the same time, S&P said it revised its outlook on CTI Foods to negative from stable.

The outlook revision reflects a more aggressive financial policy than had previously been factored into the rating and concern with the company's ability to achieve its forecasted near-term growth for its beans, soups and sauces business, the agency added.

According to S&P, the ratings on CTI Foods reflect its leveraged capital structure, modest scale of operations and customer concentration.

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