Potash Corp. Prices $750M Notes Offering


Potash Corporation of Saskatchewan Inc. (POT) announced the pricing of an offering of $750 million aggregate principal amount of 3.625% notes due Mar 15, 2024. The company plans to utilize the proceeds of the offering to refinance its $500 million aggregate principal amount of outstanding 5.250% notes maturing on May 15, 2014.

The offering is expected to close on Mar 7, 2014, subject to customary closing conditions. BofA Merrill Lynch, Morgan Stanley and UBS Investment Bank are acting as joint book-running managers of the offering.

Potash Corp. recently announced its fourth quarter 2013 results. The company logged lower profit in fourth-quarter 2013 and its earnings missed expectations due to challenging fertilizer market conditions.

Potash Corp.’s profit for the reported quarter slid roughly 45% year over year to $230 million or 26 cents per share from $421 million or 48 cents per share a year ago. Charges related to headcount reductions and weaker prices for all three nutrients – potash, nitrogen and phosphate – dragged down the bottom line.

Barring severance-related charges associated with workforce reductions, earnings of 31 cents per share fell short of the Zacks Consensus Estimate by a couple of cents.  

Revenues for the quarter fell roughly 6% year over year to $1,541 million, but surpassed the Zacks Consensus Estimate of $1,388 million. Sales fell as higher sales volume was more than neutralized by lower pricing.

Potash Corp., which is among the prominent players in the fertilizer industry along with Agrium (AGU) and Mosaic (MOS), expects fundamental drivers of fertilizer demand to remain in place in 2014 amid a weak pricing environment.

Potash Corp. is a Zacks Rank #5 (Strong Sell) stock.

Another company in the fertilizer industry with favorable Zacks Rank is The Scotts Miracle-Gro Company (SMG) which retains a Zacks Rank #2 (Buy).

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