S&P affirms Terra

Standard & Poor's said it affirmed the BB corporate credit rating on Terra Industries Inc. and removed the ratings from CreditWatch with developing implications, where they were placed on Jan. 20, following an announcement by CF Industries Holdings Inc. of a proposed acquisition of Terra.

The outlook is stable.

The action follows CF Industries' announcement that it has withdrawn its offer to acquire Terra and is not pursuing the acquisition.

"The ratings on Terra reflect its fair business position, including a narrow scope of operations in nitrogen fertilizers and a cyclical, highly competitive commodity business with margins susceptible to variable demand trends and input cost volatility," S&P analyst Paul Kurias said in a statemnet.

"Partially offsetting these risks are Terra's position as a leading player in the U.S. nitrogen market, with a large portion of domestic capacity and well-located facilities, favorable long-term demand prospects, a growing position in products for industrial and environmental markets, and strong cash flow protection measures and liquidity."

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