Moody’s: Adecoagro notes Ba2

Moody's Investors Service said it assigned a provisional Ba2 corporate family rating to Adecoagro SA and a provisional Ba2 rating to its $500 million proposed notes.

The outlook is negative, which mirrors the outlook on Brazil’s sovereign bond ratings.

Moody’s said the provisional Ba2 ratings incorporate Adecoagro's relevant positioning in Brazil’s sugar-ethanol sector, including relevant economies of scale due to the large size of its plants, high productivity levels and the ownership of over 90% of its sugarcane, which allow for one of the lowest cost profiles among its peers.

“The company’s strong credit metrics, conservative financial policies, and adequate liquidity profile are also key rating considerations, especially in light of the sugar-ethanol industry's inherent volatility,” the agency said in a news release.

“Adecoagro’s experienced management and the diversification into agricultural products in Argentina partly that mitigates weather and other event risks are additional credit positives.”

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