Cf Industries Credit Agreement

Under the term amendment, lenders` liabilities are reduced from $1.5 billion to $750 million under a revolving credit contract. In this context, a rating measure is considered (1) to be a publication of an expected or provisional credit rating attributed to a debtor or a security before the publication of an initial note; (2) an initial credit quality; (3) a revaluation or degradation of an existing credit quality; and (4) the confirmation or withdrawal of an existing credit rating if the confirmation or payment is the result of an audit of the rating assigned to the demorure or security that follows the applicable procedures and methods of the entity to determine credit ratings. Prior to 2010, CF had no long-term debt. But after the acquisition of Terra and management`s decision to change the company`s capital structure, the company`s total debt had risen to $5.8 billion by the end of 2017. The increase in debt took place in a phase marked by growth investments and large share buybacks. The debt stood at $4.75 billion at the end of March and consisted of both secured and unsecured bonds. In November 2016, CF issued $1.25 billion of collateral-backed debt securities in their capital structure by refinancing their $1 billion private unsecured bonds, maturing in 2022, 2025 and 2027. Guaranteed debts had more flexible alliance restrictions. Debt securities backed by $1.25 billion are broken down as follows: $500 million of preferred secured bonds maturing by 2021, with a coupon of 3.4% and $750 million of 4.5% of bonds backed by priority debt. Unsecured debt maturities are $500 million, maturing in 2020, $750 million in 2023, $750 million in 2034, $750 million and $750 million in 2044. We expect CF to use its 2020 unsecured bonds either before or at maturity.

Liquidity is provided by an unused refinancing facility of $750 million, maturing in September 2020, and $671 million in cash and equivalents at the end of March. Our BB rating reflects CF`s high business risk and moderate risk profiles for its Cushion Cash Flow, Solvency Score and Distance to Default. The downgrade of the rating to BB two and a half years ago was the result of the company`s lack of willingness to take credit-friendly measures at a time of weak nitrogen market conditions, a change in its fiscal policy that brought secured debts into its capital structure, and the reduction in liquidity caused by a reduced revolving credit facility. CF`s rating takes into account the company`s leverage and somewhat aggressive capital allocation policy. As The largest nitrogen producer in North America, CF is a profitable producer with an extensive and efficient transportation system to serve the United States effectively.