S&P rates Performance Food B, notes CCC+

Standard & Poor's said it assigned a preliminary B corporate credit rating to Performance Food Group Inc. and its preliminary CCC+ rating to the proposed $550 million seven-year senior unsecured notes.

The outlook is stable.

The preliminary recovery rating on the proposed notes is 6, indicating that lenders could expect 0 to 10% recovery in a default.

The ratings reflect a belief that the company's weak credit measures will improve over the next 12 to 24 months through free cash flow generation and modest profit improvement, despite facing a highly competitive environment and the risk of escalating fuel costs, S&P said.

The company's weak business risk profile reflects its inherently low levels of profitability given its participation in the low margin food service distribution industry, the agency said.

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