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Fitch puts Syngenta on Rating Watch Negative

Fitch Ratings placed Syngenta AG's foreign-currency long-term issuer default rating of BBB on Rating Watch Negative amid uncertainty over whether the company's settlement of U.S. farmer lawsuits will be supported by its new parent, China National Chemical Corp., or ChemChina.

Syngenta said in September that it agreed to settle with U.S. farmers who complained that the company rushed its genetically modified corn seeds to China before getting import approval from Chinese authorities, Bloomberg News reported.

Fitch said the settlement payouts, if funded entirely by Syngenta or without ChemChina's support, may threaten the pace of the firm's future deleveraging.

"To date, there have been no public statements by ChemChina to indicate that parental support is likely to be forthcoming," Fitch said.

The rating agency also said Syngenta's current financial profile is not consistent with its investment-grade rating, following its acquisition by ChemChina earlier this year.

A weakening of Syngenta's financial profile due to litigation-related cash outflows and declining support from ChemChina would lead to a negative ratings action, Fitch warned.

S&P Global Ratings placed Syngenta's ratings on CreditWatch with negative implications last week, also citing uncertainty over ChemChina's support to the company.

S&P Global Market Intelligence and S&P Global Ratings are owned by S&P Global Inc.