S&P rates Azgard-9 notes B+

Standard & Poor's said it assigned its B+ corporate credit rating to Azgard-9 Ltd., along with a B+ issue rating to the proposed long-term senior unsecured notes of up to $260 million to be issued by Azgard, subject to final documentation.

The outlook is stable.

The notes proceeds will be used to refinance about $143 million of Azgard's debt. The remainder will be used to refinance debt in Azgard's wholly owned subsidiary, Pak American Fertilizers Ltd., after it is merged with Azgard. The merger is expected to take place before the end of the year.

The rating reflects Azgard's small market position in the textile and fertilizer businesses, exposure to government policies for fertilizers, a highly competitive global textile industry and a highly leveraged financial profile, S&P said.

The rating benefits from a diversified business profile with limited capital expenditure plans, a stable fertilizer business, high growth in the textile business and a competitive cost advantage, the agency added.

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