Unrest' Caused by 395% Food Price Spikes
June 26, 2016 // 10:00 AM EST
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The US national security industry is planning for the impact of an unprecedented global food crisis lasting as long as a decade, according to reports by a government contractor.
The studies published by CNA Corporation in December 2015, unreported until now, describe a detailed simulation of a protracted global food crisis from 2020 to 2030.
The simulation, titled ‘Food Chain Reaction’, was a desktop gaming exercise involving the participation of 65 officials from the US, Europe, Africa, India, Brazil, and key multilateral and intergovernmental institutions.
do you see potash costs rising as negative for UAN, since farmers have fixed ferty funds so will allocate less to N fert's as K fert p[rice rises, is that your point? ,
Potash producers rise as Belarus may revive cooperation with Uralkali
Jun 23 2016, 08:58 ET | About: Potash Corporation of Saska... (POT) | By: Carl Surran, SA News Editor Contact this editor with comments or a news tip
Potash Corp. (NYSE:POT) +3.2% and Mosaic (NYSE:MOS) +2.6% premarket following reports that Belarus may cooperate with Russian potash producer Uralkali for the first time since a dispute ended the alliance between the world's two biggest potash producers in 2013, triggering a fall in global prices that have not yet fully recovered.Belarus Pres. Lukashenko hinted at cooperation during an event in Minsk but did not discuss his conditions; the previous joint venture was based in Minsk, at that time a crucial condition for Belarus and the main concern for Uralkali.Lukashenko also said Belaruskali had signed a new potash supply contract with India, although the company later said it was still finalizing the deal; aside from Belaruskali and Uralkali, POT, MOS and Germany's K+S (OTCQX:KPLUY) supply potash to India.Other relevant tickers: AGU, CF, IPI, ICL, CNHI, SQM, UAN, IPHS, EVGN
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CVR Partners Announces Final Results of Tender Offer
Jun 09, 2016 08:00:00 (ET)
SUGAR LAND, Texas, June 9, 2016 /PRNewswire/ -- CVR Partners, LP ("CVR Partners") (NYSE: UAN) today announced the final results of the previously announced cash tender offer (the "Tender Offer") by its subsidiary CVR Nitrogen, LP (f/k/a East Dubuque Nitrogen Partners, L.P., f/k/a Rentech Nitrogen Partners, L.P.) (the "Company") to purchase any and all of the outstanding 6.500% Second Lien Senior Secured Notes due 2021 (CUSIP Nos. 76011Q AA7 and U76034 AA2) (the "Notes") issued by the Company and CVR Nitrogen Finance Corporation (f/k/a East Dubuque Finance Corporation, f/k/a Rentech Nitrogen Finance Corporation). The Tender Offer expired at 5:00 p.m., New York City time, on Wednesday, June 8, 2016.
The Company has accepted for purchase $315,245,000.00 aggregate principal amount of the Notes, representing approximately 98.51% of the total outstanding principal amount of the Notes, at a purchase price of $1,015.00 per Note, for a total cost of approximately $319,973,675.00, excluding fees and expenses relating to the Tender Offer. The Company is funding the purchase of the Notes in the Tender Offer with proceeds from the issuance of CVR Partners' $645 million aggregate principal amount of 9.250% senior secured notes due 2023, which is anticipated to close on June 10, 2016.
*DJ Press Release: S&PGR Assigns CVR Partners Rtgs; -2-
May 31, 2016 17:31:00 (ET)
The following is a press release from Standard & Poor's:
-- Texas-based nitrogen fertilizer producer CVR Partners L.P. is issuing
$625 million of senior secured notes due 2023. We expect CVR Partners to use
proceeds from the offering to repay interim financing for the CVR Nitrogen
L.P. (formerly known as Rentech Nitrogen Partners L.P.) acquisition, to tender
the existing CVR Nitrogen notes and other related fees.
-- We are assigning our 'B+' corporate credit rating to CVR Partners L.P.
The outlook is stable.
-- We are also assigning our 'B+' issue-level rating with a '3' recovery
rating to the company's senior secured notes.
-- At the same time, we are raising the corporate credit and issue-level
ratings on CVR Nitrogen L.P. to 'B+' from 'B-'. The outlook is stable.
-- The stable outlook on CVR Partners L.P. reflects our expectation the
partnership will successfully integrate the newly acquired business while
maintaining adequate liquidity and adjusted debt leverage in the 4x area.
NEW YORK (S&P Global Ratings) May 31, 2016--S&P Global Ratings today assigned
its 'B+' corporate credit rating to master limited partnership (MLP) CVR
Partners L.P. The outlook is stable.
We assigned our 'B+' issue-level rating and '3' recovery rating to the
company's $625 million senior secured notes due 2023. The '3' recovery rating
indicates our expectation lenders can expect meaningful (50% to 70%; upper
half of the range) recovery in the event of a payment default.
At the same time, we raised our corporate credit and issue-level rating on CVR
Nitrogen L.P. to 'B+' from 'B-', in line with the rating on CVR Partners. The
outlook is stable.
"Our 'B+' corporate credit rating on CVR Partners reflects our assessment of a
weak business risk profile and aggressive financial risk profile," said S&P
Global Ratings credit analyst Mike Llanos. The company recently closed on the
acquisition of Rentech Nitrogen Partners L.P. Our ratings reflect the
partnership's dependence on volatile ammonia and urea ammonium nitrate (UAN)
prices, and its limited scale and geographic diversity. We have raised our
ratings on CVR Nitrogen in line with that of CVR Partners as we view it to be
a core subsidiary of CVR Partners.
The stable outlook on CVR Partners L.P. reflects our expectation the
partnership will successfully integrate the newly acquired business while
maintaining adequate liquidity and adjusted debt leverage in the 4x range.
We could lower the rating if the partnership's liquidity position weakens or
if the newly acquired assets underperform, resulting in adjusted debt to
EBITDA above 5x. This could also occur if consolidated credit measures at the
ultimate parent, CVR Energy Inc., deteriorate.
We could consider higher ratings if the partnership meaningfully improves its
scale and geographic diversity while maintaining adjusted debt leverage below
4x. However, we see that as unlikely in the next two years due to the
partnership's limited scale and near-term integration risk related to the
Rentech Nitrogen acquisition. Under this scenario, we would expect CVR Energy
Inc.'s credit metrics to remain at current levels and its asset diversity to
Rating Action: Moody's assigns first-time B1 CFR to CVR Partners, LP
Global Credit Research - 31 May 2016
New York, May 31, 2016 -- Moody's Investors Service initiated first-time ratings on CVR Partners, LP assigning a B1 corporate family rating and B1-PD probability of default rating. Ratings were also assigned to its proposed $625 million senior secured notes due 2023 at B1, in line with the CFR since it is substantively the only debt in the capital structure. The company is also proposing a $50 million ABL revolving credit facility that will be unrated. Proceeds from the notes will be used to repay the intercompany borrowings, that funded the April 1, 2016 East Dubuque acquisition, and to retire the outstanding tendered East Dubuque notes, as well as cover the tender premium and other transaction fees. Moody's also assigned an SGL-3 speculative grade liquidity rating to CVR. The rating outlook is stable.
"CVR generates solid EBITDA margins that drive good operating cash flows. The company also benefits from its two production facilities, which provide diversity of earnings and feedstocks, as well as market access to the mid-corn belt and southern plains. While the MLP structure will demand regular cash distributions, we expect CVR to manage liquidity needs prudently in the currently challenged nitrogen markets that could persist through 2017," said Lori Harris, Moody's Assistant Vice President and lead analyst for CVR Partners, LP.
Issuer: CVR Partners, LP
Corporate Family Rating, Assigned B1;
Probability of Default Rating, Assigned B1-PD;
Speculative Grade Liquidity Rating, Assigned SGL-3;
$625 million Senior Secured Notes due 2023, Assigned B1 (LGD4)
6:03 am CVR Partners announces a $625 mln private placement of senior secured notes due 2023 (UAN) : The co intends to use the net proceeds of the notes offering to repay in full and terminate its outstanding credit facility, fund its previously announced tender offer, and pay related fees and expenses.
Termination of Proposed Combination of CF Industries with OCI’s European, North American and Global Distribution Businesses
May 23, 2016
DEERFIELD, Ill. & AMSTERDAM--(BUSINESS WIRE)--
CF Industries Holdings, Inc. (CF) and OCI N.V. (OCI.NX) today announce the termination of the proposed combination of CF and the European, North American and Global Distribution businesses of OCI. The Treasury announcement on April 4, 2016 materially reduced the structural synergies of the combination. Since that time, both companies have worked together collaboratively to explore alternative transactions and structures that would be attractive to their respective shareholders. However, the companies were unable to identify an alternative acceptable to both parties and, therefore, agreed to terminate the combination.
"Although the original deal created significant value for both parties, changes in the regulatory and commercial environments forced us to re-evaluate the combination and led us to the conclusion that terminating the agreement is in the best interests of CF Industries and its shareholders." said Tony Will, president and chief executive officer, CF Industries Holdings, Inc. "I want to thank the management team of OCI for their professionalism and collaboration throughout our discussions."
OCI N.V. CEO Nassef Sawiris commented: “Despite not having been able to reach an agreement on an alternative transaction or structure, we have the utmost respect for CF’s management and I would like to thank Tony and his team for all the effort. The level of goodwill and collaboration between the two companies has been positive at all levels of management since our discussions started last year, which leads me to believe that in the future we can explore alternative ways of collaboration or structures to create value for our respective shareholders.”
As contemplated in the combination agreement, CF will pay OCI $150 million in connection with the termination.
Coffeyville Resources Nitrogen Fertilizers, LLC, located in Coffeyville, Kansas, is the only fertilizer facility in North America that utilizes a petroleum coke, or pet coke, gasification process to produce nitrogen fertilizer. The plant, which sits on 35 acres, includes a 1,300 ton-per-day ammonia unit, a 3,000 ton-per-day urea ammonium nitrate (UAN) unit and a gasifier complex having a capacity of 89 million standard cubic feet per day of hydrogen. Our gasifier is a dual-train facility, with each gasifier able to function independently of the other, thereby providing redundancy and improving reliability.
The Coffeyville plant enjoys the benefit of a stable and secure raw material supply. The primary raw material feedstock used in the plant's nitrogen fertilizer production process is pet coke, which is produced during the crude oil refining process. We currently purchase most of our pet coke from CVR Refining, which owns the Coffeyville refinery adjacent to the fertilizer plant. Please click here for more information on the Coffeyville plant's nitrogen fertilizer
But as normal seasonal conditions return in early March, prices recovered to levels comparable to the field price from last summer and prices have stayed firm into April driven by the expectation of another size and planting of corn acres this spring in the United States. The USDA confirmed this view at the end of March when it came out with its initial planting estimate of 93.6 million acres which is 6% higher than last year’s planting of 88 million acres.
This estimate was much higher than industry consensus at the time, and applies an even strong need for nitrogen fertilizers in spring than what was anticipated at the time of our last earnings call in February. A lot of nitrogen has been applied since the start of the planting season and we expect additional orders during the coming weeks to meet the expected increase and demand from our customers.
Corn prices are a critical variable for setting the UAN billed price, it usually occurs in June and July. Future corn prices are driven by a number of factors including the amount of corn that ultimately gets planted, harvest fields in the U.S. and expected global supply-demand. During the sales, the Coffeyville plant typically sales forward a substantial portion of its second half production and agreed upon pricing with delivery spread over a multi-month period.
Thing No. 1: Feltl loves fertilizer
The analyst in question, Feltl & Co., isn't necessarily the best-known name on Wall Street -- but perhaps it should be. While we don't have a lot of data collected on this analyst yet, Feltl already ranks in the top 5% of investors we track on Motley Fool CAPS, and has historically gotten more of its picks right than wrong.
Yesterday, Feltl picked up coverage of CVR Partners and assigned the fertilizer producer a strong buy rating, with a prediction the stock will hit $9.60 per share within a year (CVR currently costs closer to $8.40).