Moody's rates Tereos note Ba3

Moody's Investors Service said it assigned a Ba2 corporate family rating to Tereos and a provisional Ba3 rating to Tereos Europe's proposed €400 million senior notes, guaranteed by Tereos.

The outlook is stable.

The agency said the Ba2 corporate family rating reflects Tereos' leadership position as the second-largest sugar producer in Europe and the leader in France; its strong brands (Beghin Say, Guarani) in the retail and industrial segments; its presence in the high-yield beet production areas of France and the Czech Republic; its operations outside Europe through its cane sugar production in Brazil, Mozambique and Reunion, which provide some geographic diversification; the stability provided by its cooperative structure and long-established relationships with growers; and some price flexibility due to its ability to scale back price complements that are generally paid to growers at the end of each financial year.

However, Moody's noted that with around half of group earnings currently generated from the quota-constrained business, Tereos is highly exposed to the uncertainties related to the progress of the European sugar market reform and the potential further measures the European Commission might need to take to balance the market.

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