S&P lowers Israel Chemicals to negative

Standard & Poor’s said it revised the outlook on Israel Chemicals Ltd. to negative from stable.

The company’s BBB long-term corporate credit rating also was affirmed, along with the BBB rating on its senior unsecured debt.

The outlook revision reflects the company’s weak operating performance in 2015 and a concern that without countermeasures, the soft potash market conditions may cause the company’s profits and key financial metrics to stay below benchmarks for rating in 2016, S&P said.

The company has some scope to reduce its operating costs and capital expenditure to conserve cash, since it is committed to maintaining credit measures commensurate with the current rating, the agency added.

But, its policy of distributing about 70% of net profits as dividends reduces its financial flexibility, S&P said.

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