S&P ups Kernel, rates notes B+

S&P said it upgraded Kernel Holding SA and its senior unsecured notes to B+ from B and assigned a B+ rating to its planned senior unsecured notes.

The agency said it expects the recent improvement in credit metrics to be maintained, with limited effects from the pandemic.

A rebound in sunflower oil prices, particularly toward the end of the year, and higher grain exports from Ukraine following the operational launch of a new transgrain terminal, contributed to FY2020 being significantly better-than-expected for Kernel, S&P said.

The proposed notes will prolong the debt maturity profile. The proceeds, final amounts of which are subject to market conditions, will be used to partially refinance Kernel's $500 million of notes due January 2022, through the planned launch of a voluntary tender, S&P said.

“Depending on the final acceptance, the group intends to repay the remaining amount under the notes at maturity with available cash balances. Following this transaction, Kernel will enjoy a long-dated debt maturity profile, with no large refinancing needs until October 2024 when its $300 million senior unsecured notes are due,” S&P said.

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