S&P affirms Aventine

Standard & Poor's said it affirmed its B+ rating of Aventine Renewable Energy Holdings Inc. and assigned its B- rating to Aventine's $300 million senior unsecured notes due 2017.

The outlook is stable.

Proceeds from the offering will be used to help finance two new facilities of 113 million gallons per year, increasing the company's total nameplate production to 433 million gallons per year, the agency said.

After using IPO proceeds to pay down debt last year, Aventine will raise its fully funded debt per gallon of pro forma capacity to $0.69 with the proposed issue, S&P added.

According to the agency, the rating reflects the following risks: overbuild risk in the ethanol industry, which grew by 1 billion gpy in 2006 and is currently estimated at 5.4 billion gpy, and exposure to volatile commodity prices.

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