New York, August 17 (FinanceEnquiry.com) – Analysts at Moody’s Investors Service have revised Southern States Cooperative Inc’s ratings outlook from stable to negative and downgrades the company’s speculative grade liquidity rating from SGL 2 to SGL 1.
In a research note published yesterday, the analysts state that the change in outlook indicates the significant deterioration in Southern States’ earnings and credit metrics over the past year. Though volatility is factored into the rating, credit metrics have deteriorated to levels, which were outside the expectations.
The SGL rating is downgraded to SGL 3, which indicates the expectation that excess revolver availability might decline from recent seasonal levels. The company’s revolver allows for sufficient borrowing up to $300 million based on a seasonal borrowing base calculation.
The B1 corporate family ratings of the company continues to indicate high degree of earnings and cash flow volatility of the company caused due factors like weather and commodity price levels, which tend to fluctuate based on supply and demand.
The ratings also indicates Southern States’ low absolute profit margins and initiated pricing advantage stemming from the commoditized nature of the products.
The company has its headquarters in Richmond, Virginia and is a retailer and wholesale supplier of a diversified array of agricultural products and services like fertilizer, seed, crop protectants, animal feed, petroleum and farm and home supplies, the analysts say.
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