Rating Outlook Stable

Fitch Ratings has assigned a rating of 'A-' to Monsanto Company's (Monsanto) sale of $250 million senior unsecured five-year notes. Proceeds from the offering will be used to pay down commercial paper. Fitch rates Monsanto's senior unsecured debt and bank debt 'A-' and its commercial paper 'F2'. Rated debt was $1.7 billion at March 31, 2003. The Rating Outlook is Stable.

The ratings continue to recognize Monsanto's strong liquidity and cash flow generation, commitment to cost reduction, high brand recognition and loyalty, and a reduction of reliance on commercial paper borrowings. The company has taken positive steps to control the seasonal effects on total debt, due to a fluctuating receivables balance, through third-party funding mechanisms for its customers, and a shift of the capital structure to long-term obligations and away from commercial paper borrowings. Leverage as measured by total debt to EBITDA was 1.6 times (x) for the last 12 months ended March 31, 2003, up from 1.1x for the year ended Dec. 31, 2002. Total debt levels peak during the first half of the year due to commercial paper issuance to finance seasonal working capital. However, refinancing of commercial paper and more consistent cash flows are expected to reduce peak debt levels going forward.

Aggressive price competition from generic glyphosate manufacturers/marketers continue to reduce the revenues and profitability of the Roundup/glyphosate franchise. Monsanto is managing the market share decline of its Roundup business and expects its seeds and traits to generate a greater level of gross profit than Roundup for the first time in the 2003/2004 timeframe. The U.S. Environmental Protection Agency registered the YieldGard Rootworm trait in February, and limited quantities of seed containing this new trait will be available for the 2003 growing season. First-quarter 2003 results showed improvement in Latin America, where tighter credit controls remain in place.