Fitch rates PhosAgro notes BB+

Fitch Ratings said it assigned an expected senior unsecured rating of BB+ to PhosAgro Bond Funding Designated Activity Co.'s proposed $500 million issue of loan participation notes.

The proposed notes have major terms and conditions identical to the outstanding $500 million loan participation notes due 2018, Fitch said.

Both proposed and outstanding issues are structured in the form of a loan from the issuer, Phosagro Bond Funding Designated Activity Co., to the borrower, PJSC PhosAgro pursuant to the terms of a loan agreement, the agency said.

Operating companies, JSC Apatit and JSC PhosAgro-Cherepovets, will provide irrevocable and unconditional guarantees for the obligations of PJSC PhosAgro under the loan, Fitch said.

The proposed notes will be used to refinance the existing floating-rate debt of PhosAgro, as well as for general corporate purposes, the agency said.

The ratings reflect PhosAgro's strong market position and market-leading cost competitiveness, which continues to support its strong cash generation capacity and allows it to reduce leverage at a time of low fertilizer prices and moderate capital expenditure, Fitch said.

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