S&P Downgrades Corteva to 'BBB+' Ahead of Seed Business Spinoff

S&P Global Ratings on Thursday downgraded Corteva Inc.'s (NYSE:CTVA) long-term credit rating to 'BBB+' from 'A-', a move prompted by the agricultural science company's impending spinoff of its higher-margin seed business. The rating agency also removed Corteva from its CreditWatch negative list, where it had been placed pending the separation.

The Rating Action

The downgrade reflects the significant change in Corteva's business profile following the spinoff of its seed unit, Vylor Inc., which is scheduled for completion on October 1, 2026. S&P stated the separation reduces Corteva's overall scale and diversification.

Other specific rating actions included:

• Senior unsecured notes were lowered to 'BBB+' from 'A-'.
• Preferred stock was downgraded to 'BBB-' from 'BBB'.
• The company's short-term rating was affirmed at 'A-2'.

S&P also assigned a 'BBB+' rating to Corteva's new unsecured notes.

A More Focused Business

Pro forma for the separation, Corteva will become the world's fourth-largest crop protection company. The remaining business generated $7.5 billion in revenue and $1.35 billion in EBITDA in 2025, representing 43% of pre-separation revenue and 34% of pre-separation EBITDA, respectively, according to S&P.

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The new Corteva will retain certain legacy liabilities, including those related to PFAS, crop protection products, and underfunded pensions. The company made contributions of approximately $1.5 billion in June and July 2026 to help de-risk its pension plans.

Financial Strategy and Outlook

Following a September 15 investor day, S&P noted that Corteva's management intends to maintain a debt-to-EBITDA ratio not exceeding 2.0x. The company is targeting between $2.2 billion and $2.6 billion in operating cash flow from 2027 to 2029.

Management plans to allocate this cash flow toward:

• 55% for mergers, acquisitions, and share repurchases
• 25% for sustaining capital expenditures
• 20% for dividends

S&P assigned a stable outlook to the new rating, reflecting its expectation that Corteva will maintain its funds from operations (FFO) to total debt ratio in the 45% to 60% range.