Fitch Ratings Upgrades Terra to 'BB'; Outlook Positive.CHICAGO -- Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. has upgraded the credit ratings on Terra Industries Inc. (Terra) as follows. The Rating Outlook is Positive. --Senior secured credit facilities to 'BB' from 'BB-'; --12.875% senior secured notes to 'BB' from 'BB-'; --11.5% second priority senior secured notes to 'B+' from 'B'; --Convertible preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. to 'B-' from 'CCC+'. The rating upgrades are primarily supported by completed and pending debt reduction. The ratings also assume that book debt will remain near $331 million in the near-term. The ratings continue to be supported by Terra's cyclical earnings, high natural gas cost exposure, low business portfolio diversity, and leading positions in the domestic fertilizer market. Terra repaid $50 million of the $125 million Mississippi Chemical Corp. (MCC (The Microelectronics and Computer Technology Corporation, Austin, TX) The first high-tech research and development consortium in the U.S., created in 1982 by leading companies within the electronics industry. ) term loan in March 2005. Moreover, the company has announced its intention to repay the remaining $75 million of that term loan in June 2005. These actions would bring Terra's book debt level to $331 million, constituting 12.875% senior secured notes and 11.5% second priority senior secured notes. Fitch anticipates that book debt will remain near this $331 million level until 2007-2008 when the 12.875% notes mature and the cost to redeem the 11.5% notes becomes more attractive. The Positive Rating Outlook indicates that additional ratings movement is possible as the contribution of MCC earnings over time is more visible, a manageable debt level is maintained and high interest debt is paid off or refinanced, and future business portfolio changes improve the earnings level and/or reduce earnings volatility. Terra Industries, based in Sioux City, Iowa <noinclude></noinclude> Sioux City (IPA: [su: 'sɪti]) is a city located in northwest Iowa in the United States. As of the 2000 census, the city had a total population of 85,013. , is a major North American producer of anhydrous an·hy·drous adj. Without water, especially water of crystallization. anhydrous (anhī´drus), adj without water. anhydrous containing no water. ammonia, UAN UAN - User Action Notation. A notation from VPI for representation of activity in a graphical user interface. [H. Hartson et al, ACM Trans on Info Sys, July 1990]. solutions, and urea and a leading producer of ammonium nitrate in the U.S. and the U.K. For the trailing 12-month period ended March 31, 2005, Terra had revenue of $1.6 billion, EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become of approximately $222.9 million, and total balance sheet debt of $394.5 million. |
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