Investing.com -- S&P Global Ratings has upgraded Bunge (NYSE: BG ) Global S.A. to ’A-’ from ’BBB+’ following the completion of its merger with Viterra Ltd., removing the ratings from CreditWatch positive.
The ratings agency assigned a stable outlook to the global agribusiness company after the debt and equity exchange transaction resulted in a pro forma adjusted debt to EBITDA ratio of approximately 2.3x. S&P expects this ratio to approach 2x over the next two years as industry conditions gradually improve after further weakening through the remainder of 2025.
According to S&P, the merger strengthens the combined entity’s business risk profile by enhancing scale and diversification. The businesses are described as largely complementary with minimal geographic overlap, benefiting from Viterra’s presence in Australia, its large U.S. origination footprint, and significant wheat origination operations in Canada.
The transaction also increases Bunge’s commodity diversification by reducing its concentration in oilseeds, particularly soybeans from Brazil. Viterra’s commodity portfolio, more evenly split between grain and oilseeds, adds significant corn and wheat exposure to Bunge’s mix, while Viterra’s rapeseed, sugar, and cotton commodities further improve diversification.
S&P noted that pro forma leverage is modestly higher than initially expected, primarily due to Bunge’s trailing-12-month EBITDA declining 32% year over year as of March 31, 2025, driven by weaker soybean crush margins. The agency projects leverage may increase to near 2.5x by the end of 2025 before improving to around 2x by fiscal year-end 2026.
The ratings agency emphasized that smooth integration over the next 18-24 months is critical to maintaining the rating, particularly given current soft industry conditions. The integration process will involve merging operations, particularly functional integration of shared services, reporting systems, and elimination of redundancies.
S&P also assigned an ’A-’ issue rating to Bunge’s recently committed $2 billion tranche C senior unsecured term loan maturing in 2028, as well as to $400 million of 4.1% notes due 2028, $800 million of 4.2% notes due 2029, and $800 million of 4.65% notes due 2034.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.