S&P boosts K+S

S&P said it boosted K+S AG’s issuer rating to B+ from B, citing the company’s better-than-expected performance in 2021’s first half and improved financial guidance.

“High potash prices will push up EBITDA and, together with debt reduction from asset disposal proceeds, result in much lower-than-expected leverage in 2021. We forecast S&P Global Ratings-adjusted debt to EBITDA will strengthen to 3x-3.5x by end-2021, mainly due to a swift rebound in EBITDA amid top of the cycle market conditions. This is much lower than our previous expectation of leverage above 6x this year,” S&P said in a press release.

The agency also noted that robust market demand, with a low stocks-to-use ratio going into 2022, and limited capacity addition in the next few years will likely keep potash prices relatively high next year.

The outlook is stable.

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