DBRS Releases Report on Canpotex Limited

DBRS has today released a report on Canpotex Limited (Canpotex or the Company) that supports the recent confirmation of Canpotex’s Issuer Rating and Senior Unsecured Debt ratings at A (low), with Stable trends. The rating confirmations and Stable trends reflect the flow-through nature of Canpotex, which allows it to purchase potash from its owners at a price based on the price the potash is sold less all costs properly incurred by Canpotex to deliver and sell the potash, including debt costs. As such, payments made to its shareholders for potash purchased provide a significant freeboard to absorb any unforeseen costs incurred in the marketing, delivery or financing of potash shipments or variation in the price of potash sales.

Canpotex’s business profile has strengthened modestly with the completion of an expansion of Neptune Bulk Terminals (Canada) Ltd. port operations, a railcar maintenance facility and ongoing potash production capacity expansion efforts by its shareholder/shippers Agrium Inc. (rated BBB by DBRS), Mosaic Canada Crop Nutrition, LP and Potash Corporation of Saskatchewan Inc. (rated BBB (high) by DBRS).

Canpotex completed its first debt issue in 2013 (approximately $135 million). The Company’s indebtedness remains well within its strong financial capabilities despite lower potash sales volumes in 2012 and materially lower potash prices partially offset by the impact of a recovery of potash sales volumes in 2013.

The long-term outlook for international potash demand is good and Canpotex’s existing shareholders are executing expansions of their respective Saskatchewan operations, which are expected to lead to growing operating income for the Company. Accordingly, Canpotex is examining options for additional increases in terminal and other logistics capacity that may require further external funding and higher debt levels.

Notes:
All figures are in U.S. dollars unless otherwise noted.

DBRS has developed and utilized a credit-specific methodology published in Appendix I of our Base General Methodology for Corporate Companies.

Today’s report and the March 12, 2014, press release are available atwww.dbrs.com or contact us at info@dbrs.com.

For more information on this credit or on this industry, visit www.dbrs.com or contact us at info@dbrs.com.