Moody's gives Ingenio Magdalena notes B1

Moody's Investors Service said it gave a first-time (P)B1 corporate family rating to Ingenio Magdalena SA (IMSA) and assigned a (P)B1 rating to the proposed senior secured notes to be issued by IMSA Trust and guaranteed by IMSA. and its subsidiaries including Biomass Energy SA and Mag Alcoholes SA.

“Ingenio Magdalena SA (IMSA) (P)B1 rating is supported by its competitive position as the largest sugarcane producer in Guatemala which is the fourth largest global exporter of white sugar globally; large scale of IMSA mills with an annual crushing capacity of 6.9 million tons; stable production and price environment in Guatemala with annual production quotas for the local market and stable local wholesale prices; high percentage of energy sales with long-term contracts; export focus on the higher priced refined white sugar and efficiency of operations with high agricultural yields and efficient logistics assets,” Moody’s said in a press release.

These factors are offset by IMSA’s small size on a global scale with annual revenues of $463 million in the LTM ended in September, concentration in a single production site, in a single geographical region, Guatemala, which leaves the company highly exposed to event risks, be it weather, disease or even political risk and trade asymmetries, the agency noted.

IMSA will use the proceeds to refinance debt.

The outlook is stable.

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