Moody's rates Albaugh notes B3

Moody's Investors Service said it assigned a B2 corporate family rating to Albaugh, Inc. and a B3 (LGD4, 61%) rating to the proposed $300 million of senior guaranteed notes due 2018 to be issued by Albaugh Netherlands BV.

The outlook is stable.

The proceeds from the proposed notes will be used to repay a substantial amount of existing secured and unsecured notes.

The ratings reflect Albaugh's elevated leverage, a history of weak and volatile free cash flow generation, a relatively narrow product portfolio, a concentration of profitability and assets in South America and a single production/manufacturing site in North America, the agency said.

The ratings are supported by relatively strong market shares in specific geographies and the generally positive outlook for global farm incomes as a result of a step change in global crop prices driven by the prospect of very favorable supply/demand dynamics in the global agricultural markets, the agency added.

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