S&P gives Imcopa, notes B

Standard & Poor's said it assigned its B long-term corporate credit rating to Imcopa Importação, Exportação e Indústria de Óleos Ltda.

At the same time, the agency said it assigned a B issue credit rating to the proposed three-year $100 million notes offered by Imcopa International SA, adding that the notes will be unconditionally and irrevocably guaranteed by Imcopa.

The outlook is stable.

According to the agency, the rating assigned to Imcopa reflects the volatilities associated with the company's operations in soft-commodities and, in particular, with soybean crushing margins, the company's highly leveraged financial risk profile, including a high exposure to short-term debt and significant working capital requirements due to the soybean harvest cycle, increasing incentives for genetically modified organism planting in Brazil, which could jeopardize the company's strategy to focus on non-GMO niche products and Imcopa's below par corporate governance practices despite expected improvements in reporting practices going forward.

These negative factors are tempered by Imcopa's successful strategy of focusing on higher margin, non-GMO soybean oil and soybean meal products to date, its fair product and sales diversification, with the bulk of its sales originated from exports, the company's favorable logistics due to the proximity of its processing plants to its main suppliers of soybeans and to port terminals and its conservative hedging strategy.

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