MOODY'S UPGRADES SENIOR RATINGS OF AMERICAN MAIZE (SR. NOTES TO A3, IRBs TO Baa1). CONTINUES REVIEW FOR POSSIBLE UPGRADE ON IRBs.
New York, 04-01-96 -- Moody's Investors Service raised the rating of American Maize-Products Company's senior notes to A3 from Baa2 and that of its industrial revenue bonds (IRBs) to Baa1 from Baa2, while continuing its review of the IRB ratings for further possible upgrade. The upgrade of American Maize's senior notes rating is based upon the guarantee provided by American Maize's new parent, Eridania Beghin-Say (EBS). Moody's upgrade of the company's IRBs is based on the strategic importance of American Maize to EBS's long-term global growth strategy. The continuing review of the IRBs is focusing on the support that is provided by Eridania Beghin-Say in relation to these obligations. Eridania Beghin-Say's senior unsecured debt rating remains at A3 and is unaffected by this rating action.
Ratings upgraded are:
American Maize-Products Company -- senior notes to A3 from Baa2.
Ratings upgraded and kept under review for possible upgrade are:
American Maize-Products Company -- industrial revenue bonds to Baa1 from Baa2.
Eridania Beghin-Say completed the acquisition of American Maize on November 6, 1995 for $430 million. Concurrently, Eridania Beghin-Say sold 88% of the Swisher International tobacco business of American Maize to an investment group led by the former controlling shareholder of American Maize, William Ziegler III, for $165 million. Eridania Beghin-Say will retain the remaining 12% stake in Swisher. The acquisition of American Maize, the fifth-largest producer of starch products in the U.S., complements Eridania Beghin-Say's market leadership in European starch and enhances its global market position. However, the acquisition provides only limited scope for costs savings because of the company's current absence from the U.S. starch market. At the same time, the acquisition of American Maize reduces the cyclicality of Eridania Beghin-Say's starch business, because American Maize's product mix, which includes glucose and high fructose corn syrup, is predominantly geared towards the food and soft drinks industries, while Eridania Beghin-Say's European starch operations have a substantial exposure to the more cyclical chemical and paper industries.
Eridania Beghin-Say, is an agricultural and industrial company based in Paris, France. It is the parent of Central Soya Company in the United States and is controlled by Montedison SpA of Italy. American Maize-Products Company, formerly headquartered in Stamford, Connecticut, produces corn sweeteners and a variety of specialty starches at plants in Hammond, Indiania; Decatur, Alabama and Dimmitt, Texas.
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