S&P rates Southern States Coop notes B

Standard & Poor's said it assigned its B senior unsecured debt rating to Southern States Cooperative Inc.'s proposed $100 million senior notes due 2012. At the same time, S&P assigned its B+ corporate credit rating.

The cooperative is negotiating a proposed $165 million (or less) asset-backed revolving credit facility that will be unrated.

Proceeds from these issues will be used to refinance the company's existing senior credit facilities, repay certain other term debt, to terminate its interest rate swap agreements, and for general corporate purposes.

The outlook is negative.

S&P said the ratings on Southern States reflect the inherent cyclical nature and seasonality of the cooperative's agricultural-based businesses, low-margins, fairly high debt levels, recent financial difficulties, and modest discretionary cash flow. These factors are somewhat mitigated by the cooperative's position as a leading regional supply and marketing cooperative on the East Coast of the United States and a modest debt maturity schedule.

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