S&P upgrades Fufeng

Standard & Poor’s said it raised the long-term corporate credit rating on Fufeng Group Ltd. to BB+ from BB.

The agency also said it raised the company’s Greater China regional scale credit rating to cnBBB+ from cnBBB.

The outlook is stable.

The company redeemed all of its outstanding senior unsecured notes in September 2015, S&P said, so the BB rating and cnBBB Greater China regional scale rating on its notes was withdrawn.

The upgrade reflects an expectation that Fufeng’s financial risk profile will strengthen over the next 12 to 24 months as low funding costs in China improve the company’s fixed-charge protection, S&P said.

Steady profitability in the monosodium glutamate (MSG) segment is anticipated, the agency said, and lower interest expenses and capital spending also is expected to outweigh the negative impact of sluggish xanthan gum (XG) prices.

Fufeng also is expected to maintain a debt-to-EBITDA ratio of less than 3x over the next 12 months, S&P said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.