Investing.com -- Moody’s Ratings has downgraded Adecoagro S.A.’s corporate family rating and senior unsecured ratings to B2 from Ba2, with the outlook changed to stable from ratings under review.
The rating action concludes the review process that began when Adecoagro announced its acquisition of Profertil S.A., an Argentina-based fertilizer producer. The acquisition will increase Adecoagro’s EBITDA generated in Argentina to an average of 51% going forward, with a concentration of main assets exceeding 70%.
Despite providing larger scale and diversification, the acquisition makes Adecoagro more subject to Argentina’s creditworthiness and its foreign currency country ceiling of B2. Following the deal’s completion, Adecoagro’s debt is expected to approach $1.9 billion, up from $1.3 billion as of June 2025.
Adecoagro and ACA – Asociacion de Cooperativas Argentinas initially announced plans to acquire a 50% share of Profertil on September 8, 2025. Adecoagro later entered a deal to buy the remaining stake from YPF Sociedad Anonima, which completed the sale on December 18. Adecoagro now holds 90% of Profertil, with ACA owning the remaining 10%.
The $1.1 billion acquisition is being funded with up to $600 million in debt, $300 million in equity, and cash. When considering a full year of EBITDA from Profertil, Adecoagro’s gross leverage should improve to 2.8x by the end of 2026, compared to 3.9x in the twelve months ending September 2025. However, leverage will peak in Q4 2025 and Q1 2026 after raising the new debt.
The deal indicates a more aggressive appetite for inorganic growth following the change in control to Tether Investments S.A. de C.V. To mitigate effects on credit metrics, Adecoagro raised $300 million in equity, including a $220 million contribution from Tether.
Profertil holds a dominant position in Argentina’s fertilizer market, providing 60% of the country’s granular urea needs with a production capacity of 1.3 million tons annually and 790,000 tons of ammonia. The acquisition will increase Adecoagro’s business diversification, adding fertilizer to its current portfolio of farming operations in Argentina and Uruguay and sugar-ethanol in Brazil.
Adecoagro’s revenues are projected to increase to over $2 billion in 2026 from $1.4 billion in the twelve months ended September 2025, with EBITDA rising to $681 million from $391 million in the same period.
The stable outlook reflects expectations that Adecoagro will continue to benefit from consistent sugarcane crushing capacity and cash generation from the newly acquired fertilizer business. Ratings could be downgraded if the company’s liquidity, profitability, or credit metrics deteriorate, or if Argentina’s government rating is downgraded.
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