Moody’s: PhosAgro Bond Funding LPNs Ba1

Moody's Investors Service said it assigned a Ba1 rating with a loss given default assessment of LGD4 to the proposed senior unsecured dollar-denominated loan participation notes (LPNs) to be issued by, but with limited recourse to, PhosAgro Bond Funding Ltd. (Ba1 stable), a company incorporated as a designated activity company under the laws of Ireland.

The outlook is stable.

PhosAgro Bond Funding will issue the notes for the sole purpose of financing a loan to PJSC PhosAgro (Ba1 stable), pursuant to a loan agreement between the two companies. The loan will be additionally guaranteed by PhosAgro's major operating subsidiaries, JSC Apatit and JSC PhosAgro-Cherepovets (both unrated), which account for more than 80% of the group's consolidated revenue, EBITDA and assets.

The agency expects that the proceeds will be primarily used for repayment of part of PhosAgro's existing bank debt.

Moody’s said the Ba1 rating is at the same level as PhosAgro's corporate family rating, which reflects the assumption that the notes will rank pari passu with other unsecured and unsubordinated obligations of PhosAgro's group, including the Ba1-rated outstanding $500 million LPNs due Feb. 13, 2018 of PhosAgro Bond Funding.

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