Fitch lowers Israel Chemicals

Fitch Ratings said it downgraded Israel Chemicals Ltd.'s long-term issuer default rating to BBB- from BBB.

The outlook is stable.

Fitch also said it downgraded the senior unsecured rating on Israel Chemicals’ $800 million 4˝% senior unsecured notes due 2024 to BBB- from BBB.

The downgrades reflect a belief that the company’s FFO net adjusted leverage will remain higher than the previous negative rating guideline of 2.5x, the agency said.

Fitch said it expects the company’s leverage to stay within the 3.0x to 3.5x range from 2017 onward, driven by a protracted fertilizer price recovery.

This follows the 4.1x leverage peak at end-2016 as fertilizer prices bottomed out and Israel Chemicals made $430 million in cash investments in a Chinese phosphate joint venture at the end of 2015 and the beginning of 2016, the agency said.

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