Moody's rates EuroChem notes Ba3

Moody's Investors Service said it assigned a Ba3 rating to the proposed senior unsecured guaranteed notes to be issued by EuroChem Finance DAC and guaranteed by the parent company, EuroChem Group AG and MCC EuroChem JSC.

All of the other ratings on EuroChem, including its Ba2 corporate family rating, are unchanged.

The outlook is stable.

The proceeds from the notes will be used to fund the concurrent $500 tender offer for the existing $500 million guaranteed loan participation notes due April 2020 and the $500 million guaranteed notes due July 2021, as well as for general corporate purposes, Moody's said.

The notes will be general unsecured and unsubordinated obligations of EuroChem, ranking pari passu with all of its other unsecured and unsubordinated debt, the agency said, and will be subordinated to the unsecured debt obligations guaranteed by operating subsidiaries.

The Ba3 senior unsecured bond rating is notched down from EuroChem's Ba2 corporate family rating, primarily reflecting the notes structural subordination given that large portion of the company's debt, Moody's said.

The ratings reflect the company's strong business profile, underpinned by its large scale of operations, diversified product mix and established positions in the global and regional fertilizer markets, the agency said.

The ratings also consider the recent decline in EuroChem's leverage to 3.6x as of year-end 2018, from 4.5x a year earlier, Moody's said.

The ratings are constrained by the company's susceptibility to the current weakness in and cyclicality of the global fertilizer market, the agency said.

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