DBRS Comments on Canpotex Shareholder Structure Change

DBRS Limited (DBRS) notes that on January 2, 2018, Agrium Inc. (Agrium) and Potash Corporation of Saskatchewan Inc. (PCS) announced the successful completion of their merger and the launching of Nutrien Ltd. (Nutrien), of which Agrium and PCS became indirect, wholly owned subsidiaries. Prior to the merger, Canpotex Limited (Canpotex or the Company) was owned equally by Agrium, PCS and Mosaic Canada Crop Nutrition, LP (Mosaic; an indirect, wholly owned subsidiary of The Mosaic Company). Post-merger, Canpotex is owned equally by Mosaic and PCS (a wholly owned subsidiary of Nutrien).

As noted in DBRS’s February 17, 2017, press release, given that the merger is not expected to affect Canpotex’s operations or its rights under the Canpotex Shareholders’ Agreement, the closure of the merger has no impact on Canpotex’s Issuer Rating and Senior Unsecured Debt ratings, which remain A (low) with Stable trends.

Canpotex’s credit ratings continue to be supported by its strong business risk profile, including the commitments of its equal shareholders, its cost pass-through rights and its excellent logistical infrastructure footprint. DBRS notes the Company’s robust financial risk profile, despite the severe downturn in global potash markets since 2012. DBRS also notes that there was some evidence of stabilization in global potash markets in 2017.

Notes:
The principal methodology is General Corporate Methodology (May 2017), Canpotex Limited Appendix, which can be found on dbrs.com under Methodologies.

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