WINNIPEG (Reuters) – Shares in Saskatchewan Wheat Pool, Canada’s second-largest grain handler, climbed as much as five percent on heavy volume on June 13 after its debt rating was upgraded by Dominion Bond Rating Service.
Sask Pool stock touched a high of $6.92 early June 13, up from $6.60, after the rating service upgraded Sask Pool’s issuer rating to B (high) from B and its senior subordinated notes to B from B (low).
The stock slipped back to $6.65 late in the morning.
Sask Pool recently overhauled its share structure and restructured its debt, cutting its ratio of debt to equity to below 40 percent from levels above 60 percent.
The rating service said Sask Pool’s stronger balance sheet helped boost its rating, along with an insurance program that provides payments if adverse weather cuts grain volumes.
Weather conditions look promising for the coming year, the service said.
“While these actions are viewed favourably, the earnings profile remains challenging, and is a key limitation on the ratings,” analysts with the rating service said in a report.
