Summary
Deere & Company (DE) announced on April 14, 2003, that Standard & Poor's (S&P) intends to place its "A-" long-term credit ratings for Deere & Company and John Deere Capital Corporation on CreditWatch with negative implications. Concurrently, S&P intends to affirm the "A-2" short-term corporate credit ratings for these entities. The rating agency's potential action is attributed to concerns regarding Deere's previously disclosed postretirement obligations to employees. In response to this development, John Deere Capital Corporation has canceled a planned $225 million, two-year medium-term note offering that was scheduled to close on April 15, 2003. This cancellation was executed to ensure fairness to investors who had committed to the transaction before the S&P announcement. This event signals potential credit concerns that could impact the company's cost of capital and financial flexibility.
Key Highlights
- 1Standard & Poor's intends to place Deere & Company's long-term credit rating on CreditWatch with negative implications.
- 2John Deere Capital Corporation's long-term credit rating is also subject to S&P's CreditWatch placement with negative implications.
- 3S&P intends to affirm the short-term corporate credit ratings for both Deere & Company and John Deere Capital Corporation at 'A-2'.
- 4The primary driver for S&P's potential rating action is concerns over Deere's postretirement obligations to employees.
- 5Deere & Company has canceled a $225 million medium-term note offering due to the S&P announcement.
- 6The cancellation of the debt offering was made to protect investors who had already committed to the transaction.