DBRS confirms Potash

DBRS said it confirmed the BBB (high) senior unsecured debt rating and the R-1 (low) commercial paper rating of Potash Corp. of Saskatchewan Inc.

The trend is stable.

The company is the largest fertilizer enterprise in the world, DBRS said.

Strong 2010 earnings drove a large increase in operating cash flow, to $2.4 billion from $1.3 billion, but $2 billion in capital expenditures and share buybacks led to 45% gross debt in the capital structure at the end of 2010, higher than at the end of 2009, the agency said.

Despite the company's prospects for strong operating cash flow and good liquidity in 2011, DBRS said it is maintaining its current ratings until the sustainability of the recovery of fertilizer markets and the company's spending profile become more evident.

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