Moody's may cut Agrium, up UAP

Moody's Investors Service said it placed Agrium Inc.'s Baa2 senior unsecured rating under review for possible downgrade. At the same time, Moody's said it placed the ratings (Ba3 CFR) of UAP Agri Products Inc. under review for possible upgrade.

The reviews were prompted by the recent announcement that the two companies have entered into a definitive agreement, whereby a wholly owned subsidiary of Agrium will acquire all of the outstanding shares of UAP at a price of $39 per share for an aggregate acquisition cost of $2.65 billion, including $487 million of debt at UAP, the agency said.

Moody's said it believes the conclusion of Agrium's review is likely to result in an affirmation of its Baa2 ratings should the transaction close on the terms announced.

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