S&P: American Crystal Sugar view negative

S&P said it affirmed all of the ratings on American Crystal Sugar Co., including the BBB+ long-term and A-2 short-term corporate credit ratings.

The agency also said it revised the outlook to negative from stable.

The outlook revision reflects lower projected EBITDA expected for fiscal 2017 and higher-than-expected debt levels as the company increases debt to fund growth capital expenditures, S&P explained.

The outlook follows a weaker-than-expected 2016, during which lower-than-projected sugar prices and higher end-of-year debt balances resulted in its debt-to-EBITDA only rebounding to about 2.2x, compared with prior expectations of less than 2x, the agency said.

With debt reduction limited by ongoing capital expenditures and weaker EBITDA, S&P said it believes 2017 leverage will be further pressured this year, but should improve once operating conditions normalize.

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