Moody's rates Potash commercial paper Prime-2

Moody's Investors Service said it assigned a Prime-2 commercial paper rating to Potash Corp. of Saskatchewan Inc. and affirmed its Baa1 7.75% senior notes due May 31, 4.875% senior notes due March 1, 2013, 5.25% senior notes due May 15, 2014, 3.75% senior notes due Sept. 30, 2015, 3.25% senior notes due Dec. 1, 2017, 6.5% senior notes due May 15, 2019, 4.875% senior notes due March 30, 2020, 5.875% senior notes due Dec. 1, 2036 and 5.625% senior notes due Dec. 1, 2040.

The outlook is positive.

Potash's is establishing a $1.5 billion 4(2) commercial paper program that, in conjunction with its existing long-standing Canadian program, has an aggregate principal limit of $1.5 billion, Moody's said.

The proceeds from the proposed commercial paper program will be used for general corporate purposes.

The ratings consider Potash's good liquidity, consistent cash flow and marketable securities tempered by its planned capital expenditures and the prospect of share repurchase activity, which may increase if cash balances increase over time, the agency noted.

The Prime-2 rating reflects the expectation that the company will refinance the existing revolver by the end of 2011, the agency added.

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