S&P could lower Uralkali

Standard & Poor's said it placed its BBB- long-term corporate credit rating and ruAAA Russia national scale rating on Russian fertilizer producer Uralkali OJSC on CreditWatch with negative implications.

The CreditWatch placement follows Uralkali's announcement of a $1.5 billion share buyback, which in the agency’s view will weaken its credit metrics and reduce its currently strong liquidity cushion.

S&P expects that the $1.5 billion share buyback will significantly exceed Uralkali's free operating cash flow generation, leading to an erosion of its sizable cash balances and higher Standard & Poor's-adjusted debt figures. It therefore expects the ratio of funds from operations (FFO) to debt to decline below the 45% it previously anticipated for 2015.

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