S&P rates AGCO facility BB+

Standard & Poor's said it assigned its BB+ senior secured bank loan rating, the same level as the corporate credit rating, to AGCO Corp.'s $750 million senior secured bank credit facility and placed the new rating on CreditWatch with negative implications.

A recovery rating of '2' was also assigned, indicating substantial recovery of principal (80%-100%) in a post-default scenario. The BBB- rating on the previous bank credit facility was withdrawn.

At the same time, S&P said that the BB+ corporate credit and all other ratings on AGCO will remain on CreditWatch with negative implications.

S&P said the corporate credit rating will be affirmed following completion of the company's plan to issue at least $250 million of common equity with proceeds to be used to fund a portion of the just-completed €600 million acquisition of unrated Finland-based Valtra Corp. The rating reflects AGCO's solid business profile and expectations for an improving financial profile partly due to a less acquisitive growth strategy in the future.

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