Standard & Poor's Global Ratings has affirmed its 'B' long-term issuer credit rating on Ukraine's Kernel agricultural holding, outlook is stable and also affirmed its 'B' issue rating on the company's outstanding senior unsecured notes.

"In our view, gradually stabilizing domestic macroeconomic conditions are translating into a more favorable corporate business environment in Ukraine. However, in the near term, we see a limited positive impact on the overall credit profile of sunflower oil and grains producer Kernel Holding S.A., as the company has a large capital expenditure (capex) program and faces significant refinancing needs in January 2022," S&P said.

S&P continues to forecast negative free operating cash flow for Kernel this year, despite a delay in the execution of the capex program, and a gradual stabilization of its credit metrics by the end of the fiscal year ending June 30, 2021.

"We are therefore affirming our 'B' long-term issuer credit rating on Kernel. We are also affirming our 'B' issue rating on the company's outstanding senior unsecured notes," S&P said.

The stable outlook reflects our view that the COVID-19 pandemic will not hinder Kernel's export volumes, and that the company will be able to stabilize its credit metrics and refinance its eurobond due January 2022 within the next 12 months, S&P said.

Kernel is the world's largest producer and exporter of sunflower oil, a leading producer and supplier of agricultural products from the Black Sea region to global markets.