Fitch rates MHP bond B

Fitch Ratings said it affirmed MHP SE's long-term foreign-currency issuer default rating and senior unsecured ratings at B.

The agency also said it assigned an expected senior unsecured rating of B to MHP Lux SA's new up to $500 million bond issue.

The outlook is stable.

The ratings reflect continued growth in revenues and profits at MHP's core business of chicken raising, slaughtering and marketing, particularly thanks to the successful implementation of an export-led strategy, Fitch said.

In 2017, this compensated for a contraction in EBITDA from the company's grain-growing operations, which were affected by a country-wide weak harvest, the agency said.

Leverage remains conservative despite an increase in capital expenditure and continuing dividend payments, Fitch said.

The prospective new eurobond will enhance the company's liquidity position and enable it to maintain a sufficiently strong hard-currency debt service coverage ratio to justify a rating of one notch above Ukraine's country ceiling of B-, the agency said.

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