S&P affirms Agricore United, view up to stable

Standard & Poor's said it affirmed its ratings, including its BB long-term corporate credit rating, on Agricore United.

At the same time, S&P said it revised the outlook on the company to stable from negative.

S&P noted that the outlook revision reflects the expected conversion of the company's convertible debentures into equity by the end of calendar year 2006, a significant improvement in grain handling EBITDA expected in the current fiscal year, in light of an above-average grain harvest in calendar 2005 and preliminary indications of an average-to-above-average production in 2006, which could result in continued EBITDA improvement in fiscal 2007, matching that of fiscal 2006, especially given current favorable soil moisture levels in western Canada.

According to S&P, the ratings on Agricore reflect the company's weak credit protection metrics and the volatility associated with an agribusiness segment that is very much reliant on favorable weather conditions.

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