S&P affirms Agrium

Standard & Poor's said it affirmed the BBB long-term corporate credit rating on Agrium Inc.

The outlook is stable.

The agency said it based its affirmation on Agrium's proposed acquisition of CF Industries Inc. (not rated) on expectations that the modest amount of debt the company will add to the balance sheet will for the most part be quickly paid off through internally generated cash flows and that the business risk profile will remain unchanged.

Ratings reflect the company's good diversity, competitive cost structure relative to its North American peers and intermediate financial risk profile, the agency said.

Ratings also reflect the company's participation in the cyclical fertilizer industry and exposure to the fragmented and highly volatile nitrogen and phosphate markets, S&P noted.

"The proposed acquisition is somewhat of a departure from management's recent practice of increasing its retail business to bring stability to its historically volatile earnings," S&P analyst Jatinder Mall said in a statement.

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