Moody's ups Advance Agro view to positive

Moody's Investor Services said it changed to positive from stable the outlook for Advance Agro plc's B3 corporate family rating and the senior unsecured bond ratings on its notes due in 2007 and 2012.

The action follows the company's refinancing most of its 2007 notes, which currently show an outstanding amount of about $10 million and still exhibit a technical breach status, Moody's said. The agency said it believes the likelihood of bondholders requesting an acceleration in repayments is unlikely and the company's cash-on-hand of about $22 million at the end of 2006 is more than sufficient to meet its obligations, if needed.

The positive outlook reflects the improvement in Advance Agro's balance sheet leverage, including an adjusted total debt-to-EBITDA ratio of 3.5x, down from 4.5x a year ago.

The rating is supported by the company's competitive cost position, brand development strategy and track record for generating positive free cash flow, the agency said.

The rating also reflects the inherently volatile nature of pulp and paper product prices, Moody's added.

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