Fitch Affirms Mosaic at 'BB+'; Outlook Stable

Business Wire, June 22, 2005

CHICAGO -- Fitch Ratings has affirmed the credit ratings of The Mosaic Company (Mosaic), Mosaic Global Holdings, and Phosphate Acquisition Partnership LP. The ratings are as follows. The Rating Outlook is Stable.

-- Mosaic senior secured revolving credit facility 'BB ';

-- Mosaic Global Holdings Inc. senior secured term loans A and B 'BB ';

-- Mosaic Global Holdings senior unsecured debt with subsidiary guarantees 'BB';

-- Mosaic Global Holdings senior unsecured debt without subsidiary guarantees 'BB-';

-- Phosphate Acquisition Partnership LP senior secured notes 'BB-';

-- Mosaic mandatory convertible preferred securities 'B'.

The ratings reflect Mosaic's high debt level; significant market positions in the global potash and phosphate markets; and current financial performance. Mosaic's debt level stood at nearly $2.6 billion at the end of February 2005. The company has opportunities to reduce debt by calling notes and paying debt as it comes due over the next four years. However, Mosaic's ability to call debt early will depend in part on the degree of earnings improvement and resulting cash flow generation. Fitch expects the majority of earnings improvement to come from effective cost reduction efforts, particularly in the phosphates segment. Fitch believes Mosaic's consent agreement with the Florida Department of Environmental Protection and the credit facility's 2008 refinancing condition provide ample incentive for the company's cost reduction and debt reduction efforts.

Mosaic's strong market position in potash fertilizer is a credit positive due to the consistent, high operating margin and current tight market conditions. Additionally, Fitch recognizes Mosaic's leadership position in the phosphate fertilizer market. However, the benefit of this strong market position is offset by the weak profitability of this business. Fitch believes Mosaic has an opportunity to substantially improve the profitability of its phosphates business, but this effort will take time and significant resources.

For the trailing 12-month (TTM) period ended Feb. 28, 2005, Mosaic's total debt-to-EBITDA was 7.5 times (x) and its EBITDA-to-interest incurred was 4.1x. Note that the TTM EBITDA does not contain a full year's earnings from the IMC Global Inc. assets. Fitch expects that total debt-to-EBITDA would trend downward toward 5.0x as full year's earnings from IMC's assets are incorporated. Fitch estimates that Mosaic could generate $550 million of EBITDA once earnings from IMC assets are fully included.

The Stable Rating Outlook indicates that Mosaic's ratings will likely remain at the current levels in the next 12 months. Fitch anticipates that the company's cost reduction efforts will take some time to achieve before meaningful profitability improvement is evident and consistent. Meanwhile, Mosaic should continue to benefit from the strong potash market in the near term.

The Mosaic Company is one of the largest global suppliers of phosphate and potash fertilizers. Mosaic earned approximately $350.0 million in EBITDA on $3.6 billion in revenue TTM Feb. 28, 2005; the company had $2.6 billion in debt at that time.

Fitch's rating definitions are available on the agency's public web site, www.fitchratings.com. Published ratings, criteria and methodologies, and relevant policies and procedures are also available from this site, at all times. This document will remain on the public site for seven days.