Agency downgrades Tyson debt
Fitch Ratings has reportedly downgraded Tyson’s unsecured debt to BB+. The company has about $3 billion in debt.
The agency told the media that it expect Tyson to experience pressure to its earning and cash flow. The company expects to pay $600 million more in grain this year.
"Higher than predicted grain cost and the length of time required to pass these costs on, through pricing, is reducing the profitability of the company's poultry operations, which typically generates a significant portion of the company's cash flow," Fitch said in a news release.
Fitch also questioned whether Tyson can keep up its performance in the pork segment and there is uncertainty about Tyson's long-term chances for profitability in its beef operation.
The news comes a day after Pilgrim’s Pride stock was downgraded because of rising feed costs and lower profits.
Source: Associated Press