[More on Monsanto]
NEW YORK (Standard & Poor's) May 26, 2005—Standard & Poor's Ratings Services said today that it assigned its 'A-' preliminary senior unsecured debt rating to Monsanto Co.'s $2.0 billion Rule 415 shelf registration.
At the same time, Standard & Poor's affirmed its 'A-' corporate credit rating and other ratings on the St. Louis, Mo.-based company. As of Feb. 28, 2005, the company reported more than $1.1 billion in total debt, before the close of the Seminis Inc. acquisition. The outlook is stable.
"The ratings incorporate Monsanto's strong leadership position in crop protection, seed, and plant biotechnology, and a solid financial profile," said Standard & Poor's credit analyst Peter Kelly.
Monsanto holds strong market shares in herbicides and seeds, and is a leader in agricultural biotechnology. The company's operations are segmented into agricultural productivity, which includes a number of herbicides; and seeds and genomics, which include global businesses in seeds and related biotechnology traits. One of the company's key products is glyphosate-based Roundup, by far the world's best-selling herbicide. During the past decade, Roundup experienced very strong demand because of the acceptance of conservation tillage and no-till farming techniques for which glyphosate herbicides are ideal. Monsanto has effectively managed the expiration of Roundup patents—and the threat of generic competition—by following a strategy of steadily lowering Roundup selling prices in selected markets, which contributed to good demand and a strong market position. Consequently, Monsanto has used its low-cost position in the industry to become the leading supplier of glyphosate to other crop protection companies. Other major strengths are well-recognized brand names, high technology content, and an extensive distribution network. Still, competitors, including producers in China, are taking some share of the market.
Monsanto's seed businesses—acquired in recent years for more than $7 billion and including the recent purchases of Seminis Inc. and Emergent Genetics—hold leading shares in major crops such as corn and soybeans. Key global competitors include E.I. DuPont de Nemours & Co.'s Pioneer Hi-Bred and Syngenta, although the industry remains fragmented. The seed operations provide a platform for the introduction of new genetically engineered seeds, which complement Monsanto's focus on agricultural biotechnology. Although subject to lags in consumer acceptance of genetically modified food, especially in Europe, agricultural biotechnology offers significant long-term potential and is widely applied in the U.S. and other countries.
WASHINGTON — Monsanto Co. (MON) registered to sell up to $2 billion of mixed securities from time to time, according to a Form S-3 filed Tuesday with the Securities and Exchange Commission.
The St. Louis-based biotechnology company said the securities may be its senior or subordinated debt securities, shares of its preferred or common stock, warrants or warrant units, purchase contracts or purchase units, and may include securities convertible into or exchangeable for its preferred or common stock.
The company said the securities may also include debt securities issued by its subsidiary, Monsanto Finance Canada Co., which the company would unconditionally guarantee.
The company said the net proceeds will be used to reduce or refinance borrowings and for other general corporate purposes, and the proceeds from the sale of the debt securities of Monsanto Finance Canada will be lent by Monsanto Finance Canada to Monsanto or its affiliates.
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