Fitch Rates Monsanto's Credit Facility 'A-'.CHICAGO -- Fitch assigned an 'A-' rating to Monsanto Co.'s (Monsanto) new $2 billion five-year senior unsecured revolving credit facility. The new facility will be used for general corporate purposes and financing the proposed acquisition of Delta & Pine Land Company. The company terminated its prior $1 billion five-year senior unsecured credit facility maturing June 2009. Fitch's IDR IDR In currencies, this is the abbreviation for the Indonesian Rupiah. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. for Monsanto is 'A-' and the Rating Outlook is Stable. The facility contains one financial covenant, a maximum leverage ratio (consolidated debt to consolidated capital of no more than 0.5:1). The company's leverage as measured by total debt to total capital was 19.6% (approximately 0.2:1) at the end of the first fiscal quarter on Nov. 30, 2006. Monsanto's credit profile is supported by a conservative financial policy with a focus on balance sheet strength. The company had total debt of $1.66 billion and leverage (gross debt to latest 12-month [LTM LTM abbr. long-term memory ] EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become ) of 1.0 times (x) at the end of the first quarter of 2007. Additionally, the company maintains solid liquidity as indicated by strong free cash flow generation. Free cash flow totaled $880 million (cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses of $1.50 billion less $406 million of capital spending and $215 million in dividends) for the LTM period ending Nov. 30, 2006. Monsanto has cash and marketable securities of $1.84 billion at the end of the first quarter of 2007. Uncertainties include the ultimate timing and financing mix for the completion of the proposed Delta & Pine Land acquisition as well as any potential liabilities of Solutia Inc. (Solutia) that may become Monsanto's obligation. Monsanto is a provider of herbicides, conventional and hybrid seeds, and genetically modified seeds and traits to the agricultural industry. The company holds leading positions in the glyphosate glyphosate herbicide and desiccant for grains. Heavy doses to birds cause soft shells on their eggs. herbicide market and in seeds and biotechnology traits. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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