TEXT-S&P Raises Nufarm Snr Note Rtg To 'BBB-', Recovery Rtg To '1'

(The following was released by the rating agency)

MELBOURNE (Standard & Poor's) Oct. 12, 2012-Standard & Poor's Ratings Services today said that it had raised its rating on Nufarm Ltd.'s A$381 million senior secured syndicated bank facility to 'BBB-' from 'BB'. At the same time, we have raised the recovery rating on the secured bank facility to '1' from '3'. The higher ratings reflect a combination of the reduction in the facility size to A$381 million from A$625 million, and our view of Nufarm's improved earnings performance, which also boosts recovery prospects. The issuer credit rating on Nufarm remains unchanged, at 'BB' with a stable outlook.

The recovery rating of '1' indicates our expectations for very high recovery (90%-100%) should a default event occur. Our simulated default scenario assumes a payment default in 2014 due to material weakening in Nufarm's operating results arising from a significant and prolonged weakening in global demand from the agribusiness sector.

The 'BB' rating on Australia-based Nufarm Ltd., one of the world's top-10 makers of crop-protection products (such as herbicides, insecticides, and fungicides), reflects the company's exposure to cyclical agribusiness sectors, with a strong earnings bias to the second-half of the year. These weaknesses are partially offset by our view of the company's solid position in select global crop-protection markets, geographically-diverse operations, and strategic alliances with key global players. RELATED CRITERIA AND RESEARCH 2008 Corporate Criteria: Analytical Methodology, April 15, 2008