Rising urea prices will allow CF Industries to reduce leverage to eight-year low

Urea prices are at their highest levels for the first time since March 2013 due to strong demand driven by higher agricultural prices due to limited supply in the global market. The cost of urea is $ 215 per ton higher than June 2020, $ 190 above the five-year average. CF Industries' (-/Ba1/BB +) annual EBITDA level increases by $ 375 million on average, with urea cost increasing by $ 25 per ton. We forecast that EBITDA by the end of 2021 could exceed $ 2 billion, which will surpass the level of a year ago by 44%. This impressive performance will allow CF Industries to reduce its leverage to 1.9x, its lowest level since 2013. CF Industries' 2026 1st lien dollar Eurobonds (BBB-/Baa2/BBB-) have credit ratings one and two notches higher than the company itself, using the methodology of Fitch and Moody's, respectively. The notes with a duration of 4.9 years offer a yield of 1.5% per annum. ISIN paper - USU1579LAB54.

Owners of Terra Nitrogen Company, agricultural firm CF Industries manufactures and distributes nitrogen products, serving agricultural and industrial customers, as well as distributors, traders, and wholesalers worldwide. It serves its customers in North America through its production, storage, transportation and distribution network. Its core product is anhydrous ammonia (ammonia), which contains 82% nitrogen and 18% hydrogen. Its nitrogen products that are upgraded from ammonia are granular urea, urea ammonium nitrate solution (UAN) and ammonium nitrate (AN). Other nitrogen products include diesel exhaust fluid (DEF), urea liquor, nitric acid and aqua ammonia. The company also has nitrogen-manufacturing complexes in Canada and the UK. Almost 75% of the company's revenue comes from the US.