Bunge Global upgraded to A- by S&P following Viterra merger

S&P Global Ratings has upgraded Bunge Global S.A. to 'A-' from 'BBB+' with a stable outlook following its merger with Viterra, citing enhanced scale and diversification through complementary geographic and commodity portfolios. While initial pro forma adjusted debt to EBITDA is approximately 2.3x, potentially rising to 2.5x by year-end 2025 due to Bunge's recent EBITDA decline, S&P expects it to improve to around 2x by fiscal year-end 2026. The ratings agency emphasized that smooth integration over the next 18-24 months is critical for maintaining the rating, particularly amidst soft industry conditions.

Analysis

S&P Global Ratings has upgraded Bunge Global S.A. (BG) to 'A-' from 'BBB+', assigning a stable outlook following the completion of its merger with Viterra. The upgrade is predicated on the merger's enhancement of Bunge's business risk profile through increased scale and diversification. The combined entity benefits from Viterra's complementary geographic footprint in Australia and North America and a more balanced commodity portfolio, which reduces Bunge's concentration in oilseeds by adding significant exposure to corn and wheat. However, the initial pro forma adjusted debt to EBITDA stands at approximately 2.3x, which is modestly higher than first anticipated. This is primarily attributed to a 32% year-over-year decline in Bunge's trailing-12-month EBITDA as of March 31, 2025, driven by weak soybean crush margins. S&P projects that leverage may temporarily increase to nearly 2.5x by the end of 2025 amid soft industry conditions before improving toward 2x by fiscal year-end 2026. The rating agency has explicitly conditioned the maintenance of the 'A-' rating on a smooth operational integration over the next 18-24 months.

Key Decisions for Investors

• The upgrade to an 'A-' credit rating is a significant de-risking event that could lower future borrowing costs and broaden Bunge's appeal to institutional investors with investment-grade mandates.
• Investors should closely monitor key execution risks over the next two years, particularly the progress of the Viterra integration and any sustained weakness in commodity margins, as S&P noted that leverage could rise to 2.5x before improving.
• Re-evaluate portfolio positioning in Bunge, as the merger fundamentally alters its commodity exposure, reducing its heavy concentration in soybeans and increasing its weight in grains like corn and wheat, thereby changing its fundamental risk and earnings drivers.