...Over the past year, the U.S. ethanol indus try has experienced increasing trouble on several fronts. Credit ratings are under pressure because of low operating margins and new liquidity problems. Etha nol s margins remain so tight that servicing of debt has been difficult and potential lenders have been discouraged. Ethanol consumption is rising, thanks in part to usage mandates, thus putting pressure on corn production, the value of farmland and ultimately, some argue, food prices. And the transport and distri bution of ethanol remain a challenge. Moreover, at least two key complications have arisen since our last special comment in November ####. First, the credit crisis has worsened on a global scale. Liquidity in the marketplace has become ever tighter, and financing for the construction of new ethanol plants is ess entially not available. We believe ethanol companies will struggle to preserve existing sources of liquidity until external financing opportunities return...

Report Type: Special Comment
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