Fitch upgrades CF Industries

Fitch Ratings said it upgraded CF Industries Holdings, Inc.'s and CF Industries, Inc.'s long-term issuer default ratings to BBB- from BB+. Fitch also raised the senior unsecured notes to BBB- from BB+/RR4, affirmed the senior secured revolving credit facility and senior secured notes at BBB- and removed the RR1 recovery rating.

“Fitch expects the recovery in the nitrogen fertilizer market coupled with the early redemption of $250 million of the $750 million notes due 2023 and intention to reduce debt to $3 billion to result in total debt/operating EBITDA after associates and minorities and FFO net leverage to be sustainably below 2.5x,” the agency said in a press release.

Fitch said it forecasts operating EBITDA after associates and minorities to average roughly $1.9 billion per year through 2024 compared with about $1.6 billion for LTM June 30, 2021, and $1.3 billion in 2020.

“Given debt reduction in 2021 and intended debt reduction by mid- 2023, EBITDA after associates and minorities could be as low as $1.4 billion in 2021 and 2022 and $1.3 billion in 2023 and thereafter and still be consistent with BBB- leverage metrics,” the agency said.

The outlook is stable.

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