(The following statement was released by the rating agency) Overview
-- The 'BBB-' ratings on Viterra Inc.
remain on CreditWatch, where they were placed with positive implications June 28, 2012, pending the acquisition by Glencore International PLC
-- We will resolve this CreditWatch when we have a clear view on the completion of Glencore's acquisition of Viterra, which the companies now expect before Nov. 15, 2012.
-- Upon completion of the acquisition, we expect to equalize our issuer and issue-level ratings on Viterra, given the strategic importance of Viterra's operations to Glencore.
Rating Action On Oct. 4, 2012, Standard & Poor's Ratings Services kept its 'BBB-' ratings on Viterra Inc. on CreditWatch, where they had been placed with positive implications June 28.
The CreditWatch remains in place as the company's acquisition by Glencore International PLC, the parent of Glencore International AG (BBB/Watch Pos/A-2), is reviewed by China's Ministry of Commerce under its anti-monopoly law.
The acquisition of grain handler Viterra by commodities trader Glencore has cleared all key hurdles except the Chinese competition review, including Viterra shareholder approval and competition authority clearance in Canada, the U.S., Australia, and Europe. The transaction close has been extended several times, and the companies now expect the closing before Nov. 15.
The ratings on Viterra reflect Standard & Poor's view of the company's satisfactory business risk profile, which is supported by strong market positions in key grain-producing regions in Canada and Australia and more modest positions in downstream agribusiness and processing. In addition, we view the company's financial risk profile as intermediate, characterized by low debt leverage and strong liquidity. Viterra continues to generate solid financial performance for the 'BBB-' rating, with last 12 months debt to EBITDA of 1.7x and strong free cash flow amid solid grain handling volumes and margins.
We will resolve this CreditWatch when we have a clear view on the completion of Glencore's acquisition of Viterra. Upon closing, we expect to equalize our issuer and issue-level ratings on Viterra with those on its new parent, Glencore, given the importance of Viterra's operations to Glencore's strategy.
Related Criteria And Research
-- Key Credit Factors: Criteria For Rating The Global Branded Nondurable Consumer Products Industry, April 28, 2011
-- 2008 Corporate Criteria: Analytical Methodology, April 15, 2008
-- 2008 Corporate Criteria: Ratios And Adjustments, April 15, 2008
Ratings List Ratings Remain On CreditWatch Viterra Inc. Corporate credit rating BBB-/Watch Pos/-- Senior unsecured debt BBB-/Watch Pos
Complete ratings information is available to subscribers of RatingsDirect on the Global Credit Portal at
. All ratings referenced herein can be found on Standard & Poor's public Web site at . Use the Ratings search box located in the left column. (New York Ratings Team)