S&P ups Agrokor view to stable

Standard & Poor's said it revised the outlook on Agrokor DD to stable from negative and affirmed the B corporate credit rating.

The outlook revision reflects Agrokor's reduction of its share of short-term debt in total reported debt to less than 30% versus 50% in the previous years, the agency said.

The company managed this improvement of its liquidity position and debt maturity profile by issuing a new seven-year €400 million bond in December 2009 and obtaining a new five-year €352 million syndicated facility in June 2010.

The agency said that although the covenant target level under the new syndicated facility was relaxed and the new bond bears no maintenance covenants, headroom under the revised covenants was less than 10% as of June 30, 2010.

But S&P said it believes Agrokor's stable cash generation capacity will allow the company to comply with the covenants, and that its close relationship with partner banks will help it obtain waivers in extreme cases.

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