November 2008 Default Case Study
Generated on December 15, 2008 Contact: or

Pilgrim’s Pride Corp (PGPDQ)
On November 3, 2008, Pilgrim’s Pride Corp, the largest US chicken producer, failed to pay $25.7 million interest. On December 1,2008, the company and certain of its subsidiaries filed voluntary petition under Chapter 11 of the US Bankruptcy Code in the Northern District of Texas.

Company Profile
Pilgrim's Pride can spread its tail feathers and do a barnyard strut. As the US's #1 chicken processor, Pilgrim's operations entail breeding, hatching, raising, processing, distributing, and marketing of chicken and turkey. Prepared poultry products are sold under the Pilgrim's Pride, Pierce, Easy-Entree, and Wing-Dings labels to restaurants and grocery stores. The company sells fresh whole and cut-up poultry under the Pilgrim's Pride, Pilgrim's Signature, and Country Pride names; it also produces table eggs and other egg products, and animal feeds and ingredients. Former president and CEO O.B. Goolsby Jr. died in December 2007. COO J. Clinton Rivers, was named president and CEO in 2008.

EDF™ as of November 3, 2008: 35.00% Credit Category (not an agency rating): C
Expected Default Frequency (EDF) is the probability that a firm will default within a given time horizon. Default is defined as failure to make a scheduled payment or the initiation of bankruptcy proceedings. The main drivers of EDF credit measures are the market value of the firm (asset value), the level of its debt obligations (default point), and the volatility of firm value (asset volatility). The EDF credit measures displayed below are 1-year risk measures, although a 10-year term structure of risk is available within CreditEdge.

Default Date: 11/3/2008

This chart shows that Pilgrim’s Pride Corp’s EDF credit measure was high and reached 35.00% prior to its default on November 3, 2008. In May 2008, the company had a market value of assets at $4.3...

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