Potash Corp. of Saskatchewan, Inc. POT has announced the pricing of an offering of $500 million aggregate principal amount of 3% notes due Apr 1, 2025. This offering is expected to close on Mar 26, 2015, subject to customary closing conditions.
The company plans to use the net proceeds from the notes offering for general corporate uses, including the repayment of its $500 million aggregate principal amount of outstanding 3.750% notes, which are due to mature on Sep 30, 2015. However, Potash Corp. does not have to pay back the maturity amount before the due date.
The joint book-running managers for the notes offering are Bank of America Merrill Lynch, Goldman, Sachs & Co., HSBC and RBC Capital Markets. The co-managers of the offering are BMO Capital Markets, Scotiabank, CIBC, Mitsubishi UFJ Securities, Rabo Securities, TD Securities, Morgan Stanley, UBS Investment Bank, Credit Agricole CIB, SMBC Nikko and US Bancorp. The offering was declared effective and also filed under an automatic shelf registration statement with the Securities and Exchange Commission on Jun 28, 2013.
Potash Corp. has a competitive advantage over its peers, stemming from its mining rights to the world's largest potash reserve. The strain on the world's food supply is driving demand for all three nutrients of the company, especially potash.
While the fertilizer company should gain from expanded operational capability and a healthy demand environment this year, it is exposed to headwinds associated with weakening growth in markets outside the U.S. and a potentially weaker nitrogen pricing environment.
Potash Corp. currently carries a Zacks Rank #3 (Hold).
Better-ranked companies in the fertilizer industry include Yara International ASA YARIY, The Mosaic Company MOS and Rentech Nitrogen Partners, L.P. RNF. While Yara International sports a Zacks Rank #1 (Strong Buy), both Mosaic and Rentech Nitrogen carry a Zacks Rank #2 (Buy).
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