S&P cuts K+S

S&P said it cut the rating on K+S and its senior unsecured bonds to BB- from B. The recovery rating of 3 on the bonds is unchanged, reflecting an estimate of a meaningful recovery (50%-70%; rounded estimate 50%) in the event of a payment default.

“The rating action follows K+S’ announcement that it will reduce its potash production by up to 300kt in 2019 due to the weak potash market environment, with an estimated impact on EBITDA of up to €80 million. The challenging conditions mainly stem from weak demand from China due to ongoing high potash inventories in the country (estimated by market sources at about 3mt),” said S&P in a news release.

The outlook is stable.

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