Viterra has received a boost in its credit rating from Standard and Poor’s.
The rating service has bumped the company up to BB+ from its previous level of BB. The outlook is described as positive.
S&P analyst Maude Tremblay said the new rating reflects the company’s strong operating results. She said the upgrade reflects Viterra’s leading position in the Canadian grain business, improved profitability resulting from the acquisition of Agricore United last year, favourable industry trends and the company’s capital structure.
She noted that the rating is constrained by potential risk associated with acquisition of new companies, and the cyclical and unpredictable nature of crops and commodity markets, but overall the current situation and outlook are positive.
Read Also
Manitoba extends Crown land rent freeze
Manitoba government links the continued rental rate freeze on grazing and forage leases to economic and environmental challenges facing the industry
“Although the agribusiness industry remains inherently volatile, long-term fundamentals and growth prospects for both the industry and Viterra are favourable, with increased demand due to rising wealth in Asia and the growing use of biofuel in the U.S.”
Viterra chief financial officer Rex McLennan welcomed the upgrade and said it shows continuing market confidence in the company’s financial and operating performance.
“As we explore new opportunities and execute our growth strategy, we will use the same financial discipline to continue driving value for our stakeholders,” he said.
S&P also boosted the rating on Viterra’s senior secured bank loan to BBB and it senior secured notes to BB+.
The previous week, Dominion Bond Rating Service upgraded Viterra’s rating on senior secured notes and bank credit facility to BBB (low) from BB (high).
