It's been a tough last few months for much of the hog industry, and officials with Smithfield Foods, Inc., announced recently that the company has been no exception and has taken action to make sure the recession doesn't dip too far into the company's assets.

Smithfield officials announced late last week that the company has entered into a new $1 billion "asset-based revolving credit facility" that will protect its subsidiaries' "cash, intellectual property, equity interests in the subsidiary guarantors, inventory, accounts receivable and other personal property," through first-priority liens. A revolving credit facility, an alternative to a standard-term line of credit, will allow the company to squeeze more borrowing power from its existing assets and give the hog giant more flexibility in making credit payments as the company continues to undergo an "ongoing debt restructuring effort," company officials say.

In other words, it will help the company stretch its operating capital in a time when such assistance is desperately needed. And, it's a move Smithfield CEO and president C. Larry Pope says will help the company get through what will likely be a financially difficult period through the second half of next year.

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"With the transactions we consummated today, we have taken decisive and proactive steps to restructure our balance sheet. The new credit facility, new senior secured notes due 2014 and new Rabobank term loan provide a clear path to repayment of near-term obligations and the extension of certain mid-term maturities, while maintaining more than adequate liquidity. In addition, the new credit facility, in conjunction with our intention to refinance our present European revolver, will begin to significantly reduce our exposure to financial covenant risks," Pope says in a company report. "We believe these actions will enable us to weather the current economic environment and the results of our hog production segment, which we expect to begin to improve in the second half of fiscal 2010."

In 2008, Smithfield was the top-ranked pork producer in the U.S., with an '08 total of 1.02 million sows domestically and an additional 219,000 in Mexico, Poland and Romania. That number was down 7,000 from 2007, according to Agriculture Online's 2008 Pork Powerhouses. See more.