S&P affirms Sociedad Quimica y Minera

Standard & Poor's said it affirmed its BBB+ long-term corporate credit and senior unsecured debt rating on Sociedad Quimica y Minera de Chile SA (SQM) in light of the upcoming issue of about $100 million of bonds to be placed in the Chilean market.

As expected by S&P, SQM will be increasing its leverage in 2006, in light of its capital expenditures program, recent assets acquisition and relatively aggressive dividend policy.

Nevertheless, given expected still-moderate debt levels, projected strong cash flow generation and the company's adequate financial flexibility, SQM should be able to sustain credit measures in line with the current rating category, the agency said.

The ratings on SQM reflect the company's position as the world's leading integrated producer of specialty fertilizers, iodine and lithium, its low-cost production economics, a relatively diversified global client base and a moderate financial risk profile, S&P noted.

These strengths are partially balanced by the inherent cyclicality of the industry that translates into price volatility, an important although somewhat diminishing concentration of cash generation in specialty fertilizers, SQM's historically expansionary business profile and a relatively aggressive dividend policy, the agency said.

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