Moody's: Southern States view positive

Moody's Investors Service said it affirmed Southern States Cooperative, Inc.'s corporate family and probability-of-default ratings at B2, speculative grade liquidity rating at SGL-2 and $100 million guaranteed senior unsecured notes due 2012 at Caa1 (LGD5, 81%).

The outlook was changed to positive from stable.

Moody's said the outlook reflects improved financial performance and improved credit metrics the past year after cutting debt and improving internal cash generation.

The B2 corporate family rating is driven by material leverage on a highly competitive, low-margin business exposed to heavy seasonality tied to weather, annual crop planting schedules and exposure to volatile and cyclical commodity prices, according to the agency.

The ratings also consider that the company's liquidity and distribution infrastructure enabling it to reach a large and fragmented user base, Moody's said.

An upgrade would require a sustained debt-to-EBITDA ratio below 5 times, Moody's said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.