September 13, 2006

Fitch lowers Cargill's debt ratings as it moves towards financial services

Debt ratings of agri-giant Cargill Inc have been downgraded by Fitch Ratings as the company has increasingly become involved in the financial services businesses, which heightened its risk exposure, when compared to its core agricultural businesses, which spans the globe. 

Cargill's notes, including senior unsecured, US medium-term and Euro medium-term, were downgraded from A+ to A rating.

New debt offerings, including a US$300 million 30-year senior unsecured offering, were graded at A upon introduction.

The downgrade of Cargill's long-term ratings reflects the company's gradual increase in leverage and growing earnings contribution from its financial services segment, which is riskier than agricultural processing, Fitch said.