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Last updated on April 24, 2014 at 1:21 EDT

Fitch Affs Bunge and Corn Products IDRs at ‘BBB’ Upon All-Stock Transaction Agreement

June 24, 2008

Fitch Ratings

Judi M. Rossetti, CPA, CFA, +1-312-368-2077 (Chicago)

Wesley E. Moultrie II, CPA, +1-312-368-3186 (Chicago)

Dorothy Goczal, +1-312-368-2095 (Chicago)

Brian Bertsch, +1-212-908-0549

(Media Relations, New York)

Fitch Ratings has affirmed the following ratings for Bunge Limited (Bunge) and its subsidiaries. Concurrently, Fitch affirmed the ratings for Corn Products International, Inc. (Corn Products). The Rating Outlook for all entities is Stable.

Bunge Limited

–Long Term Issuer Default Rating (IDR) at ‘BBB’;

–Preference Shares at ‘BBB-’.

Bunge Limited Finance Corp. (Bunge Finance)

–IDR at ‘BBB’;

–Senior unsecured notes at ‘BBB’;

–Credit Facility at ‘BBB’.

Bunge Finance Europe B.V. (Bunge Europe)

–Long Term IDR at ‘BBB’.

Bunge N.A. Finance L.P. (BNAF)

–Long Term IDR at ‘BBB’;

–Senior unsecured notes at ‘BBB’.

Corn Products

–Long Term IDR at ‘BBB’;

–Senior unsecured notes at ‘BBB’;

–Senior unsecured credit facility at ‘BBB’.

Bunge had $5.2 billion of total debt with equity credit at March 31, 2008. Corn Products had $604 million of debt at March 31, 2008.

Today, Bunge and Corn Products announced a definitive agreement in which Bunge will acquire Corn Products in an all-common-stock transaction. The aggregate transaction value is approximately $5 billion, or approximately 10 times (x) Corn Products’ latest 12 months (LTM) EBITDA for the period ending March 31, 2008. This transaction value includes $604 million in Corn Products debt. The deal represents a 31% premium to Corn Products closing share price of $42.90 on Friday, June 20, 2008 and a 25% premium to the stock’s average price over the last 20 trading days. The transaction is expected to close in the fourth quarter of 2008. Separately, Bunge also raised its stand-alone earnings guidance today.

Fitch views the use of all equity for this transaction positively. The companies’ product portfolios and geographic diversification are highly complementary. The combined entity will have a broader product portfolio to present to its customers. Corn Products adds a varied product portfolio within wet corn milling to Bunge’s expertise in soybean processing and fertilizer. Corn Products generates higher margins (EBITDA margin of 13.5% for the LTM period) and maintains very low leverage (1.3x total debt/EBITDA for the LTM period).

Bunge’s ratings are supported by the company’s position as the world’s leading oilseed processor and the leading producer and supplier of fertilizer to farmers in Brazil. Credit concerns include Bunge’s prolonged negative free cash flow and its volatility in operating earnings. A long-term favorable agribusiness outlook, driven by higher demand for protein content of foods in developing countries, is considered in the ratings. Bunge’s negative free cash flow and rising debt levels are commensurate with higher levels of working capital, driven by the cost of its readily marketable commodity inventories (RMI). Fitch expects that when commodity prices stabilize or decline, debt levels will move accordingly. Earnings weakness during this period of rising debt levels would be viewed negatively. Bunge has $500 million notes due December 2008 that it plans to refinance in the near term. At March 31, 2008, Bunge had approximately $3.7 billion of committed borrowing capacity under its commercial paper program and revolving credit facilities, of which $2.5 billion was available.

Corn Products’ ratings are supported by the company’s low leverage, its extensive product mix within wet corn milling and good geographic diversification. The company’s ratings were constrained by its much smaller size versus other industry competitors and relatively limited product selection versus larger competitors. Corn Products has two senior unsecured debt issues ($200 million due in 2017 and $100 million due in 2037) with Change of Control clauses. Corn Products would be required to repurchase the notes at 101% of the aggregate principal and interest upon both a Change of Control and ratings downgrades below investment grade.

In addition to evaluating traditional credit measures, Fitch’s analysis of agricultural traders and processors takes into consideration leverage ratios that exclude debt used to finance RMI. This commodity inventory is highly liquid because of its commodity characteristics, widely available markets and international pricing mechanisms. Similarly, interest expense on debt used to finance RMI is reclassified as cost of goods sold and thus is excluded from EBITDA and interest expense. Fitch utilizes significant discretion in this calculation. With the adjustments described above, Fitch estimates that for the combined entity, total debt/EBITDA would be approximately 1x for the LTM ended March 31, 2008 and EBITDA/ interest expense would be 8.6x. Unadjusted total debt/EBITDA would be approximately 2.1x and EBITDA/interest expense would be 6.2x.

For additional information, Fitch’s special report ‘Flooding Exacerbates Impact of Soaring Commodity Prices on US Food and Agribusiness Companies’, dated June 17, 2008, is available on the Fitch Ratings web site at www.fitchratings.com.

Fitch’s rating definitions and the terms of use of such ratings are available on the agency’s public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch’s code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the ‘Code of Conduct’ section of this site.

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