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Bunge debt swells in first half of year; leverage to fall by year-end
By Devika Patel
Knoxville, Tenn., Aug. 1 – Bunge Ltd. management expects its leverage ratio will be below 3x by the end of the year, despite company debt rising recently.
“Debt has increased since the beginning of the year as a result of an increase in working capital, primarily inventory, and acquisitions,” executive vice president and chief financial officer Thomas M. Boehlert said on the company’s second quarter ended June 30 earnings conference call on Wednesday.
“We expect that the combination of a seasonal reduction in inventories and strong operating results in the second half will result in a trailing 12-month adjusted debt to EBITDA ratio below 3x by the end of the year,” he said.
Liquidity is a main concern for the company.
“Our top priorities are to maintain both a BBB credit rating as well as access to committed liquidity sufficient to comfortably support our agribusiness flows,” Boehlert said.
“We are rated BBB by all three rating agencies,” he said.
At the end of the second quarter, the company had $3.5 billion of undrawn available committed credit.
Cash and cash equivalents were $221 million as of June 30, 2018, compared to $601 million as of Dec. 31, 2017.
The agribusiness and food company is based in White Plains, N.Y.
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