Nutrien repays bridge debt with note funds, has strong balance sheet

By Devika Patel

Knoxville, Tenn., May 13 – Nutrien Ltd. is in a good position, with no maturities until 2022 and about $4 billion of liquidity following a notes sale that was used to repay short-term bridge debt.

“We have a strong balance sheet, with approximately $4 billion in liquidity, very strong cash flow,” executive vice president and chief financial officer Pedro Farah said at the virtual BMO 15th Annual Farm to Market Conference on Wednesday.

“When Covid-19 happened, we withdrew a lot of our revolver,” Farah said.

The company, he said, ended up with quite a bit of cash on its balance sheet at the end of its first quarter of 2020 and has subsequently prepaid much of its borrowings.

“We had a bridge of about $1.5 billion and now we’ve replaced that,” he said. “We’ve funded with $1.5 billion of bonds, a three-, 10- and 30-year bond, which were very well-priced. So, we have a good amount of credit, good credit rating, ample liquidity.

“We have no maturities of our debt next year, so we are sitting well.”

On Monday, Nutrien priced $1.5 billion of fixed-rate senior notes (Baa2/BBB) in three tranches.

The company sold $500 million of 1.9% three-year notes at 99.91 to yield 1.931%, or a spread over Treasuries of 170 basis points. The final pricing was tight to talk for a print at the Treasuries plus 205 bps area.

The $500 million tranche of 2.95% 10-year notes priced at 99.897 to yield 2.962%, or a Treasuries plus 225 bps spread. The tranche priced tight to talk for a spread in the 250 bps area over Treasuries.

The $500 million tranche of 3.95% 30-year notes priced at 99.738 to yield 3.965% for a spread of 255 bps over Treasuries, which was tight to talk for a spread in the area of 280 bps.

The notes are redeemable prior to maturity at par plus a make whole payment. The make-whole payment for the three-year notes is at an adjusted Treasury rate plus 30 bps. The rate is Treasuries plus 35 bps for the 2030 notes and the rate is Treasuries plus 40 bps for the 2050 notes.

Barclays, Citigroup Global Markets Inc., CIBC World Markets Corp., HSBC Securities (USA) Inc. and TD Securities (USA) LLC were the lead managers.

Proceeds will be used to reduce short-term debt, to finance capital expenditures, to fund recent growth initiatives and for general corporate purposes.

Nutrien is a Canadian fertilizer manufacturer based in Saskatoon, Sask.

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