Fitch rates Ingenio Magdalena notes BB-

Fitch Ratings said it assigned long-term foreign and local currency issuer default ratings of BB- to Ingenio Magdalena SA (IMSA) and its planned $350 million of senior secured guaranteed notes issuance due 2029. Co-borrowers under the notes will be IMSA and its main electricity and ethanol subsidiaries Biomass Energy, SA and Mag Alcoholes, SA.

The notes will be by Maquinaria Agricola, SA, Servicios CM, SA, Comercializadora de Energia para el Desarrollo, SA, Preparados y Comestibles, SA, Agropecuaria del Pacifico, SA and 17 land holding entities with arable land of 12,000 hectares.

“The company is a price taker in the international market where it exports approximately 400,000 tons of sugar. Global prices are driven often by dynamics affecting Brazil and India, which combined produce approximately 40% of the world's sugar. High global fuel prices, including ethanol, should result in Brazilian producers continuing to favor sugarcane ethanol production, resulting in lower supply of sugar in the near term,” Fitch said in a press release.

IMSA will also secure a bank loan for $200 million.

The proceeds of will be used primarily to refinance total combined debt of $533 million.

The outlook is stable.

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