CF Industries Holdings, Inc.
) subsidiary CF Industries, Inc. announced the pricing of $1.5
billion public offering of senior notes, comprising $750 million
aggregate principal amount of 5.150% senior notes due 2034 and
$750 million aggregate principal amount of 5.375% senior notes
CF Industries plans to utilize the proceeds from the offering to
fund its capital expenditure programs and stock repurchases and
for other general corporate purposes, including working capital.
The senior notes offering is expected to close on Mar 11, 2014,
subject to customary closing conditions. Morgan Stanley & Co.
LLC and Goldman, Sachs & Co. are acting as joint book-running
managers of the offering.
CF Industries posted better-than-expected fourth-quarter 2013
results on Feb 18. The company's adjusted earnings (excluding
one-time items) of $4.47 per share was down roughly 38.5% from
the year-ago earnings of $7.27 a share. However, the results
exceeded the Zacks Consensus Estimate by a penny.
Adjusted earnings exclude non-cash pre-tax mark-to-market
gains on natural gas derivatives, pre-tax gains on foreign
currency derivative and share buyback impact. Including one-time
items, the company earned $5.71 a share in the quarter, down
roughly 22.8% from $7.40 in the year-ago quarter. Lower prices
and higher natural gas costs led to the earnings decline.
Sales were down 10% to $1,326.3 million in the quarter from
$1,481.4 million in the prior year, but exceeded the Zacks
Consensus Estimate of $1,266 million. Sales declined primarily
due to lower average selling prices for both nitrogen and
phosphate products, and lower phosphate sales volume.
CF Industries, which is one of the leading fertilizer makers
), should benefit from favorable natural gas costs in North
America and a solid start to the domestic planting season.
Moreover, the company has a strong cash flow profile, which
allows it to return value to shareholders and invest in growth
CF Industries currently retains a Zacks Rank #3 (Hold).
Other players in the fertilizer industry worth a look include
Chemical & Mining Co. of Chile Inc.
The Scotts Miracle-Gro Co.
). Both carry a Zacks Rank #2 (Buy).
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