S&P rates PhosAgro notes BBB-

S&P said it assigned a BBB- rating to PhosAgro Bond Funding DAC's proposed loan participation notes of up to $500 million.

The agency also said it placed the rating on CreditWatch with negative implications.

PhosAgro Bond Funding, an orphan special-purpose vehicle of PhosAgro PJSC, will issue these notes solely for the purpose of financing a loan to PhosAgro, S&P said.

The proceeds will be used for refinancing its existing bank debt, predominantly foreign currency-denominated debt due over the next one to two years, the agency explained.

The rating and negative watch on the notes are in line with the views on PhosAgro, S&P said.

The obligations will be backed by equivalent-ranking obligations with equivalent payment terms in the form of a loan issued by PhosAgro, which is to be unconditionally and irrevocably and jointly and severally guaranteed by two of the group's 100%-owned key operating subsidiaries, JSC Apatit and JSC PhosAgro-Cherepovets, the agency said.

Together, Apatit and PhosAgro-Cherepovets generate about 80% of the group's EBITDA, S&P said.

The agency said it plans to resolve the CreditWatch by May 31.

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