Moody’s changes Suedzucker to negative

Moody's Investors Service said it changed the outlook on the Baa2 long-term issuer ratings of Suedzucker AG to negative from stable.

All ratings, including the long-term issuer rating of Baa2 and the short-term Prime-2 ratings of Suedzucker and of Suedzucker International Finance BV, were affirmed.

The agency also affirmed Suedzucker International Finance's junior subordinated rating of Ba2.

"The negative outlook follows the company profit warning announcement on 26th of March and our expectation that weakness in sugar prices for more than 12 months, both globally and across Europe, might result in a structural decline in the company's profitability and cash flow generation," Paolo Leschiutta, Moody's senior vice president and lead analyst for Suedzucker, said in a news release.

"Our assessment of the company's credit quality will depend on how well the company adapts to a lower pricing environment following the liberalization of the sugar market across the EU and ongoing low world sugar prices including in terms of management of breakeven point and cash as well as financial policies."

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