ConAgra's $400M Floating-Rate Nts Rated 'BBB+' by S&P.NEW YORK--(BUSINESS WIRE)--Standard & Poor's-- June 14, 1999-- Standard & Poor's today assigned its triple-'B'-plus rating to ConAgra Inc.'s $400 million floating-rate notes Floating-rate note (FRN) Note whose interest payment varies with short-term interest rates. floating-rate note An unsecured debt issue with an interest rate that is reset at specified intervals (usually every six months) according to a due 2000. The triple-'B'-plus long-term corporate credit and senior unsecured debt Unsecured debt Debt that does not identify specific assets that the debtholder is entitled to in case of default. ratings for the company, as well as the triple-'B' subordinated debt Subordinated Debt A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known as "junior security" or "subordinated loan". rating, were affirmed. The 'A-2' short-term corporate credit and commercial paper ratings for the company also were affirmed. The outlook is stable. Approximately $5.3 billion of total debt was outstanding as of Feb. 28, 1999. The ratings reflect ConAgra Inc.'s relatively low business risk derived from a diverse portfolio of leading packaged-food brands, as well as the company's major positions in meat packing, poultry, flour milling, grain trading, and agricultural inputs. These factors are offset, in part, by moderately high debt leverage. ConAgra has maintained a consistent record of earnings growth while managing several commodity-related businesses. Cash flow is strong, with funds from operations Funds From Operations (FFO) Used by real estate and other investment trusts to define the cash flow from trust operations; earnings with depreciation and amortization added back. to total debt of about 38% in fiscal 1998. Adjusted pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern interest coverage has steadily improved to about 3.7 times (x) in fiscal 1998 from 2.4x in fiscal 1991. Debt leverage (adjusted for operating leases Operating Lease A lease contract that allows the use of an asset, but does not convey rights similar to ownership of the asset. Notes: An operating lease is not capitalized it is accounted for as a rental expense. , hedged commodities, and receivable sales) has declined significantly, to about 50% in fiscal 1998 from 66% in fiscal 1991, due to the strong cash flow and improved product mix. Weakness in the company's meat and poultry businesses had a negative impact on financial results in 1998, but was largely offset by improvements in the performance of other parts of the business. During the first three quarters of 1999, the performance of the meat and poultry business improved significantly from the depressed 1998 levels. The company also should benefit, over time, from its recently announced restructuring activities and strategic initiatives. Despite the $810 million of pretax charges associated with these programs, they are expected to generate annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. savings of about $600 million over the next three years. Acquisitions are expected to remain an important source of growth. Future investments are expected to be moderately sized and financed with internally generated cash and debt in a manner consistent with the company's financial policies. OUTLOOK: STABLE The outlook anticipates continued gradual improvement in ConAgra's overall financial profile and no significant changes in the company's acquisition financing strategy or financial policy.--CreditWire Copyright 1999, Standard & Poor's Ratings Services Ratings Service A company, such as Moody's or Standard & Poor's, that rates various debt and preferred stock issues for safety of payment of principal, interest, or dividends. |
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