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Biotech / Medical : Monsanto Co.

MTC 2.025

-13.8%

Nov 17 3:59 PM EST

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To: Joe Wesley who wrote (589)	11/23/1998 2:51:00 PM
From: Anthony Wong	Read Replies (1) of 2539

NEW YORK (Dow Jones)--Standard & Poor's Monday affirmed its ratings on Monsanto Co. and its unit. These ratings were removed from CreditWatch, where they were placed May 12. The outlook is negative. At the same time, S&P assigned its single-Ar-minus rating to Monsanto's proposed issuance of $500 million of adjustable conversion-rate equity securities (ACES), which consist of junior subordinated deferrable debentures due November 2003 and a purchase contract under which the holder will purchase Monsanto common stock in November 2001. S&P said the affirmation incorporates expectations that recently announced initiatives - including plans to divest non-core businesses and to issue common equity and equity-linked securities - will lead to meaningful debt reduction in the near term and bolster the financial profile that has been stretched by a series of mostly debt-financed acquisitions "Ratings recognize Monsanto Co.'s strengthened positions in pharmaceuticals and agricultural chemicals, including its leadership in the emerging plant biotechnology sector, as well as prudent financial policies that reflect a near-term focus on debt reduction. The company spun off its industrial chemicals operations in late 1997 and now is focused on higher growth, more stable agricultural, pharmaceutical and food ingredients markets. "Many product lines enjoy above-average profitability and solid cash flow generation. In particular, the blockbuster Roundup herbicide product lines benefit from very strong and entrenched market positions. The company faces the potential of heightened generic competition when key Roundup patents expire in year 2000, but the company's sound strategy to address competitive challenges through pricing adjustments and cost reductions should mute potential adverse effects. "Weaker than anticipated success in the commercialization of new products or additional debt-financed acquisitions would forestall the strengthening of the financial profile that is expected over the next two years and would lead to a ratings downgrade," S&P said. OUTSTANDING RATINGS AFFIRMED AND REMOVED FROM CREDITWATCH Rating Monsanto Co. Corporate credit rating A Short-term corporate credit rating A-1 Senior unsecured debt A Medium-term notes A Commercial paper A-1 Monsanto Defined Contribution & Employee Stk Ownership Trust Senior unsecured* A *Guaranteed by Monsanto Co. (END) DOW JONES NEWS 11-23-98 01:11 PM

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