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Credit Rating Affirms Financial Strength

Credit Rating Affirms Financial Strength

Fonterra Co-operative Group has welcomed the decision by Standard & Poor’s to maintain the Group’s credit rating.

The credit rating agency assigned Fonterra a long term rating of “AA-” and a short term rating of “A-1+” (with stable outlook), matching its previous rating from a year ago.

Fonterra chief executive Craig Norgate said the rating reflected the ongoing financial strength of the Group.

“This means we are considered a conservatively geared business with an above average business profile and a very strong capacity to pay our bills.

“The rating is particularly pleasing given that the number of corporate downgrades globally has exceeded upgrades by almost three to one over the past year.”

The rating puts Fonterra on a par with banks such as ANZ, ASB Bank, Citibank and Westpac.

Standard and Poor’s cited Fonterra’s globally competitive cost structure and the diverse nature of its customer and export markets which reduce the risks of global trade.

The rating agency also noted that Fonterra’s co-operative structure gives it a high degree of flexibility in determining its cost base.

Fonterra’s joint venture initiative with Nestlé in the North and South American markets (Dairy Partners Americas) was seen as a positive move as was performance against identified merger benefits.

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