MUMBAI (Thomson Financial) - Standard & Poor's Ratings Services said it has affirmed ethanol maker VeraSun Energy Corp's 'B+' corporate credit rating and the 'B+' senior secured rating on the company's 210 mln usd notes maturing in 2012.
The ratings agency said it has assigned a '3' recovery rating to the senior secured notes, indicating expectations of meaningful recovery of 50-70 pct in the event of default.
The outlook is stable.
S&P said with the acquisition of ASAlliances Biofuels and the announced acquisition of US Bioenergy, VeraSun will have existing and planned ethanol production capacity of 1.64 bln gallons per year by end-2008, making it the largest ethanol producer in the US.
The company's ability to service debt and be in a position to refinance the corporate bonds depends on successful completion of the Welcome, Minnesota and Hartley, Iowa facilities, as well as the eventual completion of the Reynolds facility, S&P added.
Moreover, any acquired assets must begin operation and pay down project-level debt before cash flows are fully realized at the parent company, the agency said. TFN.newsdesk@thomson.com ndi/pmi COPYRIGHT Copyright Thomson Financial News Limited 2007. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.