S&P puts K+S on watch

S&P said it placed the BBB- long-term and A-3 short-term corporate credit ratings and all of the issue ratings on K+S AG on CreditWatch with negative implications.

The CreditWatch placement results from continued weak selling prices on international potash markets, combined with operational constraints at K+S operations in Germany, S&P said.

So far this year, potash prices have been $30 to $40 below projections with key benchmark contracts being signed by K+S's competitor JSC Belaruskali with major customers from India and China at $227 and $219 per metric ton, respectively.

This was due to the weakened supply-demand equilibrium and expectation of further capacity start-ups in 2017 to 2018, S&P said.

Over the coming weeks, the agency said it will meet with the company’s management to discuss potential mitigating actions, progress on the ramp-up of the company's important Legacy project and review the second-quarter results.

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