Fitch Ratings placed Nufarm's (ASX:NUF) BB Long-Term Issuer Default Rating on Rating Watch Negative (RWN) following a recently disclosed review of its seed technologies segment, according to its Monday release.

Fitch also assigned the BB rating on the senior unsecured notes issued by the company's subsidiaries, Nufarm Australia and Nufarm Americas, on RWN.

The rating indicates potential risks to the company's ability to deleverage its balance sheet, with persistent market oversupply and ongoing US-China trade tensions contributing to the uncertainty.

The agency expects the company's earnings before interest, taxes, depreciation, and amortization leverage will remain at around 5.5x in the fiscal year ending September, before improving to below 4.5x from fiscal year 2026.

The company is expected to prioritize cost, capital expenditure, and net working-capital reduction in response to slower-than-expected price recovery and ongoing trade tensions.

Fitch anticipates no immediate positive rating action due to the RWN, but may resolve the RWN and take negative rating action if there's no clarity on the seed technologies review outcome within six months.