CHICAGO — Standard & Poor’s Ratings Services on Feb. 3 affirmed its “BBB+” long-term and “A-2” short-term corporate credit ratings on Moorhead, Minn.-based American Crystal Sugar Co., and revised the company’s outlook to “stable” from “negative.”
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| Stephanie Harter, a credit analyst with Standard & Poor’s |
“The outlook revision to stable reflects the improved operating outlook for the company, in part because of a significantly larger 2015 harvest but also because of an October 2015 ruling by the U.S. (Department of Commerce) against Mexico for illegally dumping subsidized sugar into the U.S.,” said Stephanie Harter, a credit analyst with Standard & Poor’s. “The ruling allows the U.S. to keep a five-year suspension agreement in place that regulates the volume and price of Mexican sugar imports, which reduces the risk of oversupply and low sugar prices. Based on a double-digit increase in harvest ton in 2015 and low-single-digit increases in sugar prices, we believe EBITDA will rebound in fiscal 2016 and restore the cooperative’s cash flow ratios to historical levels, including debt to EBITDA near or below 1.5x.”
