Moody's upgrades Tyson rating and outlook

NEW YORK

Moody's Investors Service on Thursday upgraded its ratings on Tyson Foods Inc., given the meat producer's improved debt position and strengthening marketplace.

The ratings agency upgraded Tyson's corporate family and probability of default ratings by one notch to "Ba2" from "Ba3" and changed its rating outlook to "Positive" from "Stable". The rating is now two notches below investment-grade status.

Moody's said that feed input costs are likely to remain manageable and it expects the export market and price for proteins to improve. Its positive outlook is based on Tyson's continuing debt reduction and generally conservative financial approach.

The move follows actions last month by ratings agencies Standard & Poor's and Fitch to raise their ratings on Tyson, citing its improved operating performance and credit ratios and reduced debt.

The company in August reported an 89 percent jump in third-quarter net income, helped by higher beef and pork prices and a chicken business that's recovering. The company has been working through an industrywide downturn brought on by a combination of higher production costs and slumping demand as shoppers cut back on trips out to eat. But Tyson has said it expects beef, chicken, pork and turkey production to rise in 2011 from this year. It also expects exports to rise in 2011.

Tyson shares fell 55 cents, or 3.3 percent, to close Thursday at $16.04.