S&P rates Tereos BB, notes BB-

Standard & Poor's said it assigned its BB long-term corporate credit rating to Tereos Union de Cooperatives Agricoles a Capital Variable.

The outlook is stable.

At the same time, Tereos' €400 million senior secured bond notes, proposed through its wholly owned subsidiary Tereos Europe SA, were assigned a BB- rating, with a recovery rating of 3.

The corporate credit rating reflects Tereos' aggressive financial profile in light of its ongoing diversification and transformation process, requiring substantial capital expenditure, the increasingly volatile market conditions for the global sugar industry and increasing margin pressure in the generally protected European sugar market, caused by the current revision of the sugar regime by the European Commission, the agency said.

S&P added that the rating is supported by the group's satisfactory business risk profile, owing to its position as the second-largest sugar processor of the European Union, its proven track record of operating efficiency and diversification and its ongoing support by its cooperative shareholders, evidenced through repeated capital contributions in the past.

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