The ratings on U.S. Foodservice Inc. (USF) reflect Standard&Poor's Ratings Services' opinion that the highly leveraged food service distributor's profit margins will likely deteriorate over the near term due to potentially lower demand and higher expenses, specifically escalating food and fuel costs; however, credit measures should remain near current levels due to interest cost savings and modest debt repayment associated with its refinancing. Nevertheless, pro forma for the recent refinancing, the company's credit protection measures are weak for the 'B' rating category medians, including leverage in the high-7x area and the ratio of funds from operations (FFO) to total debt of about 7.3%. We view the company's business risk profile as fair given its participation in an intensely
