Grain handler Viterra has announced that Standard and Poor’s Ratings Services today raised the Company’s long-term corporate credit rating to ‘BB+’ from ‘BB’, with a positive outlook.
In its report Standard and Poor’s cited Viterra’s leading position in Canadian agribusiness and improved profitability from its integration of Agricore United (AU) as driving factors in its decision. It expects Viterra’s profitability will continue to strengthen as further synergies are realized.
Standard and Poor’s also increased the ratings on Viterra’s Senior Secured Bank Loan to ‘BBB’ and its Senior Secured Notes to ‘BB+’.
“This rating increase is another example of the market’s confidence in our financial and operating performance,” said Rex McLennan, Viterra’s Chief Financial Officer. “As we explore new opportunities and execute our growth strategy, we will use the same financial discipline to continue driving value for our stakeholders.”
This news follows Viterra’s announcement on July 24, 2008 that Dominion Bond Rating Service upgraded the rating of Viterra’s Senior Secured Notes and Bank Credit Facility to BBB (low) from BB (high), with a stable trend.
Corporate bonds under the Standard and Poor’s rating system that are BBB up to AA are said to be “medium grade investment bonds” and are of the second-highest quality for corporate bonds.
In 2001 corporate bonds of Sask Wheat Pool (the forerunner of Viterra) was downgraded to junk bond status as rumours of the company’s economic woes caused many to wonder if it had a future.