Global ratings firm Fitch Ratings has assigned a rating of ‘BBB-‘ to Corn Products International’s proposed US$250m senior unsecured notes offering. The Rating Outlook is Stable.

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The company, a global producer of corn-refined goods, said that it intends to use the majority of the net proceeds to pay down the outstanding balance of its senior unsecured revolving credit facility which matures in December 2002. Fitch anticipates that it will negotiate a US$100m senior unsecured revolving credit facility. The remaining net proceeds, if any, will be used for general corporate purposes.


In a press release, Fitch explained that “Corn Products’ geographic diversification and broad product mix within the wet-corn milling industry has resulted in relatively stable operating earnings and cash flows.


“The ratings are supported by these attributes and by management’s commitment and ability to meaningfully reduce debt. These positives are balanced with a weakened credit profile resulting from Corn Products’ debt-financed acquisitions in Latin America and Asia.


Furthermore, uncertainties regarding sales of high fructose corn syrup in Mexico and economic weakness in Argentina will continue to restrict sales and operating earnings growth in the near term.”

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Fitch expects improvements in the company’s credit statistics on a sequential quarterly basis, as excess free cash flow, resulting from cost reductions, is used to reduce debt.


Corn Products paid down US$35m of debt during the Q1 2002 and plans to reduce debt by an additional US$70m by the end of 2002. The company is confident that this goal is attainable, and it has the flexibility to reduce capital expenditures, if necessary, to pay down debt. Fitch does not anticipate any debt-financed acquisitions or share repurchases over the near term.