Nufarm Downgraded To 'BB-' On Continued Weak Performance And European Business Impairment; Outlook Stable

Nufarm Ltd.'s credit metrics remain stretched despite reduced debt following the sale of its South American businesses. The Australia-based crop protection manufacturer's subpar earnings for fiscals 2019 and 2020 mean its credit metrics will likely remain outside our expectation for a 'BB' rating. Nufarm's most recent results were hit by operational issues with its European business, margin pressures across key operating regions, and working capital demands. Its adjusted debt-to-EBITDA ratio was 4.8x for the year ended July 31, 2020, higher than our downward trigger of 3.5x. On Oct. 19, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Nufarm to 'BB-' from 'BB'. At the same time, we lowered the long-term issue ratings on Nufarm's A$555 million senior

...October 19, 2020 - Nufarm Ltd.'s credit metrics remain stretched despite reduced debt following the sale of its South American businesses. The Australia-based crop protection manufacturer's subpar earnings for fiscals 2019 and 2020 mean its credit metrics will likely remain outside our expectation for a '##' rating. - Nufarm's most recent results were hit by operational issues with its European business, margin pressures across key operating regions, and working capital demands. Its adjusted debt-to-EBITDA ratio was 4.8x for the year ended July 31, 2020, higher than our downward trigger of 3.5x. - On Oct. 19, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Nufarm to '##-' from '##'. At the same time, we lowered the long-term issue ratings on Nufarm's A$555 million senior secured bank facility to '##+' from '###-' (recovery rating of '1'), its US$475 million senior unsecured notes to 'B+' from '##-' (recovery rating of '5'), and its subordinated NSS hybrid notes to...

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