Tyson Credit Upgraded After Debt Restructure

Tyson Foods Inc. debt got an upgrade from one agency a week after Standard & Poor’s downgraded its credit rating to junk status on Sept. 4.

On Sept. 12, following an announcement that Tyson added collateral and guarantees to its $1 billion credit agreement, Fitch Ratings of Chicago upgraded its rating on Tyson’s debt from BB+ to BBB-. BB is a speculative rating while BBB indicates good credit. The plus or minus indicates the ratings position within the category.

On Sept. 4, Tyson announced a 20 million share offering and priced $450 million in convertible senior notes maturing in 2013 to pay down debt and fund acquisitions and strategic investments. After the market closed, S&P downgraded Tyson’s debt from BBB- to BB.

On Sept. 10, the Springdale-based meat producer said it would set a share price of $12.75 for the Class A common shares and that former company chairman Don Tyson will purchase 3 million of the shares.

Also on Sept. 10, Tyson announced a 60 percent acquisition in Shandong Xinchang Group, a Chinese poultry producer, as it continues to expand internationally.

At the end of the fiscal third quarter on June 28, Tyson had $2.7 billion in long-term debt.

Tyson, along with the rest of the industry, has been hammered by rising fuel and feed costs. It posted a 92 percent drop in profit from a year earlier, and took a $44 million loss in its chicken unit.

Shares closed at $13 on Sept. 15, 5 percent above its 52-week low and 33 percent below its 52-week high.