Moodys.com
Close
Please Note
We brought you to this page based on your search query. If this isn't what you are looking for, you can continue to Search Results for ""
The maximum number of items you can export is 3,000. Please reduce your list by using the filtering tool to the left.
Close
Close
Email Research
Recipient email addresses will not be used in mailing lists or redistributed.
Recipient's
Email

Use semicolon to separate each address, limit to 20 addresses.
Enter the
characters you see
Close
Email Research
Thank you for your interest in sharing Moody's Research. You have reached the daily limit of Research email sharings.
Close
Thank you!
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
Already a customer?
LOG IN
Don't want to see this again?
REGISTER
OR
Accept our Terms of Use to continue to Moodys.com:

PLEASE READ AND SCROLL DOWN!

By clicking “I AGREE” [at the end of this document], you indicate that you understand and intend these terms and conditions to be the legal equivalent of a signed, written contract and equally binding, and that you accept such terms and conditions as a condition of viewing any and all Moody’s inform​ation that becomes accessible to you [after clicking “I AGREE”] (the “Information”).   References herein to “Moody’s” include Moody’s Corporation, Inc. and each of its subsidiaries and affiliates.

Terms of One-Time Website Use

1.            Unless you have entered into an express written contract with Moody’s to the contrary, you agree that you have no right to use the Information in a commercial or public setting and no right to copy it, save it, print it, sell it, or publish or distribute any portion of it in any form.               

2.            You acknowledge and agree that Moody’s credit ratings: (i) are current opinions of the future relative creditworthiness of securities and address no other risk; and (ii) are not statements of current or historical fact or recommendations to purchase, hold or sell particular securities.  Moody’s credit ratings and publications are not intended for retail investors, and it would be reckless and inappropriate for retail investors to use Moody’s credit ratings and publications when making an investment decision.  No warranty, express or implied, as the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any Moody’s credit rating is given or made by Moody’s in any form whatsoever.          

3.            To the extent permitted by law, Moody’s and its directors, officers, employees, representatives, licensors and suppliers disclaim liability for: (i) any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with use of the Information; and (ii) any direct or compensatory damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud or any other type of liability that by law cannot be excluded) on the part of Moody’s or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with use of the Information.

4.            You agree to read [and be bound by] the more detailed disclosures regarding Moody’s ratings and the limitations of Moody’s liability included in the Information.     

5.            You agree that any disputes relating to this agreement or your use of the Information, whether sounding in contract, tort, statute or otherwise, shall be governed by the laws of the State of New York and shall be subject to the exclusive jurisdiction of the courts of the State of New York located in the City and County of New York, Borough of Manhattan.​​​

I AGREE
Rating Action:

MOODY'S UPGRADES FMC CORP.'S SR. UNSECURED RATINGS TO Baa3; OUTLOOK STABLE

22 Jun 2005
MOODY'S UPGRADES FMC CORP.'S SR. UNSECURED RATINGS TO Baa3; OUTLOOK STABLE

Approximately $1.1 Billion of Long-Term Debt Affected

New York, June 22, 2005 -- Moody's Investors Service upgraded all of FMC Corporation's ("FMC") senior unsecured debt ratings to Baa3. This ratings action was consistent with Moody's previous statement that the existing debt ratings would be raised to Baa3 upon completion of an amended bank facility that incorporates terms and conditions suitable for an investment grade profile. As part of this action, Moody's upgraded to Baa3 from Ba1, FMC's amended senior credit facility consisting of a $250 million term loan A and a $600 million revolving credit facility, both now due June 2010. Proceeds from the amended credit facility will primarily be used to redeem the $355 million 10.25% senior secured notes due 2009. The other debt ratings were raised to reflect the banks' willingness to forego a secured position. Moody's also withdrew FMC's Ba1 senior implied rating and SGL-2 speculative grade liquidity rating. The upgrade also reflects Moody's belief that the company has made significant progress reducing contingent liabilities and improving credit metrics, and that a general economic upturn will translate into improved performance for 2005 and 2006. This action completes a review that was initiated on June 6, 2005. The ratings outlook is stable.

The following summarizes the ratings activity:

$45 million debentures due 2011 - raised to Baa3 from Ba2

Medium-term notes due 2005 to 2008 - raised to Baa3 from Ba2

Senior unsecured industrial revenue bonds due 2007 to 2032 -- raised to Baa3 from Ba3

$600 million revolver due 2010 - raised to Baa3 from Ba1

$250 million term loan A due 2010 - raised to Baa3 from Ba1

$355 million 10.25% senior secured notes due 2009 - raised to Baa3 from Ba2*

* Will be withdrawn upon redemption.

Ratings Withdrawn:

Senior Implied Rating - Ba1

Issuer Rating - Ba3

Speculative Grade Liquidity Rating - SGL-2

$100 million senior secured letters of credit facility due 2009 - Ba1

The revised ratings reflect FMC's moderate leverage; product, customer, and geographic diversification; good business scale with 2004 revenues exceeding $2 billion; and leading market positions in such products as peroxides, carrageenan, and soda ash (the company typically has number one or two market share in most of its product lines). In addition, Moody's believes FMC's results are somewhat less susceptible to the economic cycle than other chemical manufacturers due to the size of their agricultural and biopolymers businesses. Additionally, Moody's believes that the impact of rising petrochemical feedstock and energy costs is less than many other commodity chemical producers'. The upgrade is also supported by improving operating margins, the strong performance of the Agricultural segment, improving supply/demand fundamentals within the Industrial Chemicals segment, and the use of near-term asset sales to support debt reduction. However, the ratings also consider agricultural market risks including the seasonality of sales, the significant influence of weather, and the effect of crop prices and government subsidies on farmers' use of FMC's herbicide and insecticide products. The ratings also reflect continued spending for environmental remediation, an underfunded pension balance, operating leases, the cylicality of the Industrial Chemicals segment, and the potential for higher input costs to pressure operating margins.

The primary borrowers under the amended credit facility (rated Baa3) will be FMC Corp. and certain foreign subsidiaries. Domestic borrowings under the credit facility will be guaranteed by FMC's direct and indirect material domestic subsidiaries and international borrowings will be guaranteed by FMC Corporation. The credit facility will be unsecured, a material change from the current facilities. Moody's does not believe that the guarantees, as currently structured, represent enough of a benefit to the banks to suggest notching differences with other debt. FMC's position as a borrower is further improved by the elimination of a mandatory prepayment provision and by the removal of limitations on acquisitions and dividends. In the event that both S&P and Moody's continue to rate FMC investment grade, the material adverse change and litigation representations required at every borrowing will also be eliminated.

FMC's existing $355 million 10.25% senior secured notes are to be redeemed as part of the refinancing. This debt is currently secured on a second-priority basis by certain domestic manufacturing and processing facilities and by FMC's shares of FMC Wyoming Corp., and are guaranteed by the same subsidiaries as the credit facility. The security falls away if FMC's bank facilities are unsecured. Many of the provisions (including limitation related to asset sales, additional indebtedness, and restricted payments) also fall away in the event that both S&P and Moody's rate the 10.25% notes investment grade. FMC's existing medium-term notes and debentures have substantially the same security provisions as the senior secured notes, and with the banks having released their security interests the remaining medium-term notes and debentures are equally and ratably positioned with the unsecured bank facility.

The ratings are further supported by FMC's moderate leverage and the fact that the proposed refinancing will reduce the company's annual interest expense by a run rate of approximately $20 million. FMC's reported interest expense in 2004 was just over $80 million. The company has announced its intention to reduce net debt to $600 million by the end of 2005. The ratings also incorporate more favorable industry dynamics within FMC's soda ash product line, whereby soda ash is the largest component of Industrial Chemicals revenues (FMC markets soda ash through its 87.5% interest in FMC Wyoming Corp.). Soda ash capacity utilization has significantly improved from the particularly weak levels experienced in 2000 and 2001, and current operating levels are close to 100% for operating units in the U.S.. Moreover, the closure of American Soda by Solvay and price increases announced by the industry should significantly improve operating performance in 2005. Moody's recognizes that the company will not realize the full benefit of these price increases in 2005 as a significant portion of customer contracts contain price restrictions. Most of these restrictions should expire by the end of 2006.

The ratings also reflect improving fundamentals in phosphorous chemicals (Astaris) and hydrogen peroxide, which have also benefited from higher demand and industry capacity shut-downs. Within North America, FMC is a leading producer of hydrogen peroxide and Astaris is the second leading producer of phosphorous chemicals, behind Innophos. Moody's expects that FMC will benefit from the improving economy in North America and the tighter supply/demand balance for both of these products. Nevertheless, Moody's is concerned that Astaris is at a moderate cost disadvantage compared to Innophos, due to the lack of vertical integration and the inability to produce all of its downstream products from wet acid. Astaris, uses thermal acid to produce certain of its products.

The ratings also consider the strong performance of FMC's Agricultural segment, driven by a favorable global farm economy and above-normal pest pressures in Latin America. The Agricultural segment's EBITDA had been steady at $100 million over the three years ending 2003 and increased to just under $150 million in 2004. Operating margins have improved above 20%. Moreover, this segment should continue to post good earnings due to a healthy pipeline of new products and high crop prices. Moody's also derives comfort from the fact that insecticides (75% of Agriculture segment revenue) tend to be less susceptible to competition from GMO crops compared to herbicides. However, the ratings recognize that FMC is a small player in both insecticides and herbicides and actions by competitors could have a significant negative impact on FMC's financial performance.

The stable outlook reflects Moody's expectation that the company will generate at least $120 million of free cash flow in 2005, and that it will sustain or increase the current volume of business. The ratings could be further upgraded if stronger-than-expected demand or a further reduction in contingent liabilities results in a sustainable annual retained cash flow to adjusted debt above 35%. Conversely, the ratings or outlook could be lowered if a debt-financed acquisition or a reversal in recent positive demand trends results in adjusted debt to EBITDA exceeding 4.0 times or free cash flow to adjusted debt less than 10% over the next 12 months. Moody's notes that upon completion of management's often stated goal of reaching investment grade further debt reduction in 2006 and 2007 is likely to be limited. At some point, Moody's expects FMC to consider the reinstitution of dividends and other mechanisms to return cash to shareholders. Moody's believes that these shareholder efforts will remain consistent and balanced with the goal of maintaining an investment grade profile.

The rating also derives support from FMC's strong liquidity, supported by the amended $600 million revolving credit facility, a significant pro forma unrestricted cash balance, a favorable debt maturity profile, as well as improving earnings, primarily stemming from the strong performance of the agricultural business. Furthermore, the city of San Jose approved a two-phase purchase agreement with FMC with respect to 75 acres of property for a purchase price of $81 million. The initial phase of this agreement was completed in the first quarter for some $56 million. However, the rating also reflects seasonality stemming from the agricultural business, the likelihood for increased capital spending, and that spending for environmental remediation and other legacy liabilities will continue to pressure cash flow. More specifically, Moody's estimates that the company will spend approximately $20 million in 2005 for the remediation and shutdown of the Pocatello, Idaho facility as well as other restructuring spending. Additionally, Moody's anticipates voluntary pension contributions continuing in 2005 and beyond (pension plan was funded 86.2% and 85.9% as of 2003 and 2004 year-end, respectively). Overall, Moody's expects the company will generate free cash flow in the range of $120 million in 2005 (excluding Astaris payments) and will be slightly higher in 2006.

FMC Corporation is a diversified chemicals company headquartered in Philadelphia, Pennsylvania. The company reported revenues of $2.1 billion for the LTM ended March 31, 2005.

New York
Mark Gray
Managing Director
Corporate Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

New York
William Reed
VP - Senior Credit Officer
Corporate Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

No Related Data.
© 2019 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE MOODY’S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’S RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.

CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.

All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the Moody’s publications.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDIT RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.

Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating, agreed to pay to Moody’s Investors Service, Inc. for ratings opinions and services rendered by it fees ranging from $1,000 to approximately $2,700,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.

Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY250,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.

​​​​​​
Moodys.com