Blog Coverage CF Industries Announced Capacity Expansion; Total Annual Gross Ammonia Capacity Increased to 1.2 Million Tons
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LONDON, UK / ACCESSWIRE / December 29, 2016 / Active Wall St. blog coverage looks at the headline from CF Industries Holdings Inc. (NYSE: CF) as the Company announced on December 28, 2016, the completion of the Company's capacity expansion projects. CF Industries stated that the new ammonia and urea plants at its Port Neal, Iowa, and Nitrogen Complex have been successfully commissioned and started-up. Register with us now for your free membership and blog access at: http://www.activewallst.com/register/.
One of CF Industries Holdings' competitors within the Agricultural Chemicals space, Monsanto Co. (NYSE: MON), is expected to report earnings on January 05, 2017 before market open. AWS will be initiating a research report on Monsanto in the coming days.
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Capacity Expansion
CF Industries' ammonia plant, which began production in late November, was operating at approximately its nameplate capacity of 2,425 tons per day. The back-end of the plant (ammonia synthesis) was recently taken offline to replace a gasket and is expected to resume production shortly. The Company noted that the front-end of the ammonia plant continues to operate and produce carbon dioxide which is used to feed the new urea plant. The urea plant, which was commissioned in early December 2016, has produced on specification granular urea. The urea plant was also recently taken offline to replace a relief valve and is expected to resume production shortly as well.
"CF's capacity expansion projects are complete," said Tony Will, President and Chief Executive Officer of CF Industries, "With projected returns significantly above our cost of capital, we have built the foundation for CF's growth and greatly increased our cash generation capability."
Post completion of the project, the total annual gross ammonia capacity at the Company's Port Neal plant is now 1.2 million tons, up from 380,000 tons previously. Output from the new ammonia capacity will largely be upgraded to urea. Total annual urea capacity at Port Neal is now 1.4 million tons, up from 50,000 tons previously.
Debt Structure
On November 21, 2016, CF Industries announced the prepayment of its senior notes due 2022, 2025, and 2027 for an aggregate principal amount of $1.0 billion. The Company also paid the related make-whole amount of approximately $170 million. CF Industries stated the make-whole amount was significantly less than the amount previously estimated (approximately $210 million as of October 31, 2016) as a result of subsequent changes in market interest rates.
CF Industries announced that the payment for the senior notes and make-whole payment using the proceeds from its previously announced offering of $1,250,000,000 aggregate principal amount of senior secured notes comprising $500,000,000 aggregate principal amount of senior secured notes due 2021 and $750,000,000 aggregate principal amount of senior secured notes due 2026.
CF Industries noted that with the completion of the offering and the prepayment of the senior notes, amendments to the Company's revolving credit facility, which include among other things, changes in and additions to the financial covenants and a reduction in the size of the facility from $1.5 billion to $750 million became effective.
Stock Performance
At the close of trading session on Wednesday, the stock closed the trading session at $31.63, dropping 1.00% from its previous closing price of $31.95. A total volume of 3.64 million shares have exchanged hands. CF Industries Holdings' stock price advanced 12.20% in the last month, 33.58% in the past three months, and 33.29% in the previous six months. The stock currently has a market cap of $7.37 billion and has a dividend yield of 3.79%.
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