S&P rates Rustavi Azot notes B-

Standard & Poor’s said it assigned a B- long-term corporate credit rating to Rustavi Azot LLC.

The agency also said it assigned a B- rating to Rustavi Azot’s proposed $180 million senior unsecured notes due in 2020 issued by Agrochim and guaranteed by Rustavi Azot. The notes rank pari passu with Rustavi Azot’s current and future unsecured debt.

The notes will be used to refinance current indebtedness totaling about $81.4 million, S&P said, and pay $89.2 million in dividends to shareholders to refinance shareholder debt.

The outlook is positive.

The ratings reflect Rustavi Azot’s small scale and an expectation of its high leverage in the next several years, the agency said.

S&P also said it factors in the company’s limited maturities in the next 12 months and its healthy profitability.

The ratings are constrained by Rustavi Azot’s small scale and scope, the agency said, and especially its dependence on a single ammonia plant in Georgia, which exposes the company to above-average operating risks and limits operating flexibility.

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